SPANISH FORK CITY, UTAH INDEPENDENT AUDITORS' REPORT …financialreports.utah.gov/auditedfinancial... · spanish fork city, utah table of contents year ended june 30, 2012 beginning

SPANISH FORK CITY, UTAH INDEPENDENT AUDITORS' REPORT

BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2012

SPANISH FORK CITY, UTAH TABLE OF CONTENTS YEAR ENDED JUNE 30, 2012

Beginning on Page

INDEPENDENT AUDITORS' REPORT 1

MANAGEMENT’S DISCUSSION AND ANALYSIS 3

BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Assets 15 Statement of Activities 16 Fund Financial Statements:

Balance Sheet – Governmental Funds 17 Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities 18 Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Funds 19 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 20 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund 21 Statement of Net Assets – Proprietary Funds 22 Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds 23 Statement of Cash Flows – Proprietary Funds 24 Statement of Fiduciary Net Assets 25 Statement of Changes in Fiduciary Net Assets 26 Notes to the Financial Statements 27

SUPPLEMENTARY INFORMATION:Combining and Individual Fund Statements and Schedules:

Combining Balance Sheet – Nonmajor Governmental Funds 67 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds 68 Combining Statement of Net Assets -- Nonmajor Proprietary Funds 69 Combining Statement of Revenue, Expenses and Changes in Net Assets -- Nonmajor Proprietary Funds 70 Combining Statement of Cash Flows – Nonmajor Proprietary Funds 71

Beginning on Page

OTHER REPORTSIndependent Auditors’ Report on Compliance and on Internal Control Over

Financial Reporting Based on an Audit of Basic Financial Statements Performed in Accordance With Government Auditing Standards 75

Independent Auditors' Report on Compliance in Accordance with Applicable The State of Utah Legal Compliance Audit Guide 77

SINGLE AUDIT REPORTS Independent Auditors’ Report on Compliance with Requirements that Could Have

a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OBM Circular A-133 81

Schedule of Findings and Questioned Costs 83 Schedule of Expenditures of Federal Awards 85 Notes to the Schedule of Expenditures of Federal Awards 86

1

INDEPENDENT AUDITOR’S REPORT

Honorable MayorMembers of the City Council Spanish Fork City, Utah

Mayor and Council Members:

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Spanish Fork City, as of and for the year ended June 30, 2012, which collectively comprise Spanish Fork City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of Spanish Fork City’s management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Spanish Fork City, as of June 30, 2012, and the respective changes in financial position and cash flows, where applicable, and the budgetary comparison for the general fund thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report dated January 28, 2013, on our consideration of Spanish Fork City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

2

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 3 through 11 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Spanish Fork City’s basic financial statements. The combining non-major fund financial statements on pages 67 through 71 are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards on pages 79 through 86 is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements. The combining and individual non-major fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole.

Larson & Rosenberger, LLP January 28, 2013

3

MANAGEMENT’S DISCUSSION AND ANALYSIS

As management of Spanish Fork City, we offer readers of Spanish Fork City’s financial statements this narrative overview and analysis of the financial activities of Spanish Fork City for the fiscal year ended June 30, 2012. We encourage readers to consider the information presented here in conjunction with the financial statements which follow this section.

FINANCIAL HIGHLIGHTS

� The total net assets of Spanish Fork City increased $4,669,692 to $215,657,016.The governmental net assets increased by $4,167,591 and the business-type net assets increased by $502,101.

� The total net assets of $215,657,016 are made up of $ 176,418,849 in capital assets net of related debt and $39,238,166 in other net assets.

� The General Fund (the primary operating fund) had a decrease in its fund balance of $2,025,824.

� The City’s total long-term liabilities decreased by $859,027 during the current fiscal year.

REPORTING THE CITY AS A WHOLE

This discussion and analysis is intended to serve as an introduction to Spanish Fork City’s basic financial statements. Spanish Fork City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also includes other supplementary information in addition to the basic financial statements.

The government-wide financial statements are designed to provide readers with a broad overview of Spanish Fork City’s finances, in a manner similar to a private-sector business.

• The statement of net assets presents information on all of Spanish Fork City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of Spanish Fork City is improving or deteriorating. However, you will also need to consider other non-financial factors.

• The statement of activities presents information showing how the City’s net assets changed during the fiscal year reported. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus all of the current year’s revenues and expenses are taken into account regardless of when cash is received

4

or paid. Both of the government-wide financial statements distinguish functions of Spanish Fork City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The government-wide financial statements can be found on pages 15-16 of this report.

REPORTING THE CITY’S MOST SIGNIFICANT FUNDS

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Spanish Fork City also uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

• Governmental funds - These funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. These fund statements focus on how money flows into and out of these funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps users determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds in a reconciliation included with the fund financial statements. The only major governmental fund (as determined by generally accepted accounting principles) is the General Fund. The balance of the governmental funds is determined to be non-major and is included in the combining statements within this report.

• Proprietary funds - Spanish Fork City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Spanish Fork City uses enterprise funds to account for its Electric Utility, Water Utility (Culinary and Pressurized Irrigation), Sewer Utility, Solid Waste Collection Utility, Storm Drainage Utility, Golf Course Operations, Swimming Pool and Gun Club. Internal service funds are an accounting device used to accumulate and allocate costs internally among Spanish Fork City’s various functions. The City uses an internal service fund for maintenance of its vehicles and equipment. Because this service primarily benefits governmental activities, it has been included with governmental activities in the government-wide financial statements. As determined by generally accepted accounting principles, the Electric, Water and Sewer enterprise funds meet the criteria for major fund

5

classification. The other enterprise funds are classified as non-major and are included in the combining statements within this report.

• Fiduciary funds - These funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting method used for these funds is much like that used for proprietary funds.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of Spanish Fork City, assets exceed liabilities by $215,657,016.

By far the largest portion of Spanish Fork City’s net assets ($176,418,850 or 82%) reflects its investment in capital assets (e.g., land, buildings, infrastructure assets, and machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The following table summarizes the City’s net assets.

Spanish Fork City’s Net Assets

2012 2011 2012 2011 2012 2011Current and other assets 15,004,000 16,622,029 33,754,624 36,655,915 48,758,624 53,277,944 Capital assets 86,620,257 81,408,869 118,584,121 114,944,804 205,204,378 196,353,673 Total assets 101,624,257 98,030,898 152,338,745 151,600,719 253,963,002 249,631,617Other liabilities 7,025,068 6,673,191 1,707,462 1,538,516 8,732,530 8,211,707 Long-term liabilities outstanding 18,798,455 19,724,461 10,775,000 10,708,000 29,573,455 30,432,461 Total liabilities 25,823,523 26,397,652 12,482,462 12,246,516 38,305,985 38,644,168 Net assets:Invested in capital assets, net of related debt 67,650,056 61,505,351 108,768,793 105,154,480 176,418,849 166,659,831Restricted 4,429,582 4,454,858 1,677,801 2,424,498 6,107,383 6,879,356 Unrestricted 3,721,096 5,672,934 29,409,688 31,775,203 33,130,784 37,448,137 Total net assets 75,800,734 71,633,143 139,856,282 139,354,181 215,657,016 210,987,324

Governmental Activities Business-type Activities Total

6

The following table summarizes the City’s changes in Net Assets.

2012 2011 2012 2011 2012 2011Revenues:Program revenues: Charges for services 6,890,962 6,339,122 37,115,567 35,404,648 44,006,529 41,743,770 Operating grants and contribs 1,370,902 1,388,563 - - 1,370,902 1,388,563 Capital grants and contribs 4,037,936 3,478,708 2,242,838 2,494,579 6,280,774 5,973,287 General revenues: - Property taxes 2,720,342 2,782,052 - - 2,720,342 2,782,052

Sales and Use Tax 6,034,804 5,456,220 - - 6,034,804 5,456,220 Other taxes 588,700 490,310 - - 588,700 490,310 Unrestricted investment earnings 92,182 62,684 164,430 146,403 256,612 209,087

Joint Venture Gain (Loss) 338,108 (12,945) (61,253) - 276,855 (12,945) Miscellaneous 3,000,250 850,000 - 3,000,250

Gain (Loss) on Sale of Capital Assets (30,428) (2,931) (49,256) 69,301 (79,684) 66,370 Total revenues 25,043,758 20,831,783 39,412,326 38,114,931 64,456,084 58,946,714

Expenses: - General government 3,356,613 3,446,538 - - 3,356,613 3,446,538 Public safety 5,557,593 5,210,315 - - 5,557,593 5,210,315 Public works 9,144,385 8,410,947 - - 9,144,385 8,410,947 Parks and recreation 7,305,349 1,648,533 - - 7,305,349 1,648,533 Operating expenses (business type) - - 33,579,119 32,400,577 33,579,119 32,400,577 Interest expense 843,333 877,123 - 843,333 877,123

Total expenses 26,207,273 19,593,456 33,579,119 32,400,577 59,786,392 51,994,033 Increase in net assets before transfers (1,163,515) 1,238,327 5,833,207 5,714,354 4,669,692 6,952,681 Transfers 5,331,106 731,106 (5,331,106) (731,106) - - Increase in net assets 4,167,591 1,969,433 502,101 4,983,248 4,669,692 6,952,681 Net assets - beginning 71,633,143 69,663,710 139,354,181 134,370,933 210,987,324 204,034,643 Net assets - ending 75,800,734 71,633,143 139,856,282 139,354,181 215,657,016 210,987,324

Governmental Activities Business-type Activities Total

7

FINANCIAL ANALYSIS OF GOVERNMENT’S FUNDS

The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spend-able resources. Such information is useful in assessing the City’s financing requirements. As of the June 30, 2012, the City’s governmental funds (General, Debt Service, Special Revenue, and Capital Project Funds) reported combined fund equity of $7,442,289. This represents a decrease of $2,048,409under last year’s ending balances. This decrease is the result of both a planned budget transfers of funds being held for the Capital Projects Fund and the appropriation of the beginning fund balance. The General Fund is the chief operating fund of the City. All activities which are not required to be accounted for in separate funds either by state or local ordinance or by a desire to maintain a matching of revenues and expenses are accounted for in this fund. Capital project funds are used to account for the acquisition of capital assets with transfers made from the General Fund and other funds.

Taxes continue to be the largest source of revenue in the Governmental Funds ($9,343,846) and represent 50% of total governmental funds revenues. The largest element of taxes is sales and use taxes as it has been for the last several years.

As stated earlier, the City maintains several enterprise funds to account for the business-type activities of the City. The separate fund statements included in this report provides the same information for business-type activities as is provided in the government-wide financial statements. However, the difference is that the fund statements provide much more detail.

GENERAL FUND BUDGETARY HIGHLIGHTS

During the fiscal year, the General Fund original budget was amended from an original budget expenditure total of $19,064,799 to a final budget of $ 19,578,357. A major contributing factor in the increase was the budget increase to the use of beginning fund balance. During the fiscal year, the City had some capital expenditures it had not foreseen at the time of the original budgeting process.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital assets - Spanish Fork City’s investment in capital assets for its governmental and business-type activities as of June 30, 2012, amounts to $205,204,377 (net of accumulated depreciation). This investment in capital assets includes land, buildings and systems, improvements, infrastructure (streets, sidewalks, curb and gutter, etc.), and machinery and equipment. Capital assets include contributed infrastructure from developers.

8

Major capital asset events during the current fiscal year included the following:

Streets�Improvements:�Maintenance�and�Rebuilding�of�existing�roads�for�$2,884,057�

Equipment�for�$52,175�

Land�for�$578,126��

Park�Improvements:�River�Reclamation�Improvements�for�$112,705�North�Park�Improvements�for�$86,397�Purchase�of�Land�for�$48,045�Canyon�View�Park�Improvements�for�$296,219�River�Trail�Improvements�for�$394,523��

Other�Improvements:�Library�Books�&�Media�for�$129,932�Cemetery�Road�Renovation�for�$127,488�New�Fairgrounds�Arena�for�$4,003,201�Fairgrounds�Pavilion�Renovation�for�$121,297�New�Ballpark�Scoreboards�for�$35,651��

Water�&�Pressurized�Irrigation�Improvements:�Water�Improvement�Projects�for�$2,829,369�Pressurized�Irrigation�Improvements�for�$1,216,712�Purchase�of�Water�Rights�for�$41,252�Water�Supplies�Building�for�$28,235��

Sewer�Improvements:�Purchase�of�SUVMWA�Land�for�$182,520�Sewer�Improvements�for�$756,606��

Electric�Improvements:�Relay�Tester�Equipment�for�$54,238�Electric�Improvements�for�$832,445��New�Garbage�Cans�for�$36,834��

Storm�Drain�Improvements:�Land�for�$110,004�Flood�Control�and�Prevention�for�$230,940�Storm�Drain�Improvements�for�$1,285,260��

9

Spanish�Fork�Community�Network:�High�Speed�Internet�Hardware�for�$700,746�Metal�Shop�Building�for�$284,622�Broadband�Equipment�for�$98,272��City�Wide�Equipment�Purchases�for�$270,705�City�Wide�Vehicle�Purchases�for�$1,041,551�

The following table summarizes the City’s changes in Capital Assets.

2012 2011 2012 2011Land 11,924,013$ 11,297,842$ 2,427,003$ 2,134,479$ Water Shares - - 4,458,638 4,417,387 Buildings 22,540,243 19,112,441 4,424,373 4,272,998 Improvements 15,967,718 15,786,121 103,045,312 100,143,829 Equipment 3,810,321 3,359,882 4,228,795 3,976,111 Infrastructure 32,377,961 31,852,583 - - Total Net Assets 86,620,256$ 81,408,869$ 118,584,121$ 114,944,804$ Net of Depreciation

Governmental Activities Business-type Activities

Spanish Fork City's Capital Assets

Additional information on the City’s capital assets can be found in the footnotes to this financial report and also the supplemental section.

Long-term debt - At June 30, 2012, the City had total long-term debt outstanding of $29,573,455. Of that, $10,775,000 is debt secured solely by specific revenue sources (i.e., revenue bonds within the Electric and Water Utilities). $18,798,455 is debt secured solely by tax sources (ie., Sales Tax revenue and Property Tax increment for the RDA).

10

The following table summarizes the City’s changes in Long-term debt.

2012 2011 2012 2011Capital Lease 95,143$ 148,455$ -$ -$ Accrued Vacation & Sick Leave 1,165,684 1,130,067 492,154 455,989 Revenue Bonds 18,703,312 19,724,484 10,775,000 10,708,000

Total Outstanding Debt 19,964,139$ 21,003,006$ 11,267,154$ 11,163,989$

Governmental Activities Business-type ActivitiesSpanish Fork City's Outstanding Debt

State statutes limit the amount of general obligation debt (G.O.) a governmental entity may issue to 4% of its total taxable value of $1,214,662,243. The City currently has no outstanding general obligation debt. The current limitation for the City is $ 48,586,490which is significantly in excess of the City’s outstanding general obligation debt. In addition, state statute allows for an additional 4% to be used for water, sewer, or electrical projects thus resulting in a debt limit of 8% of total taxable value. The current limitation for these water, sewer and electrical projects is thus $97,172,979 which again significantly exceeds the outstanding business-type activity debt.

Additional information on the outstanding debt obligations of the City can be found in the footnotes to this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES

• The unemployment rate for Utah County (of which Spanish Fork is one of the principal municipalities) was 6.1% compared with a state unemployment rate of 6.0 % and a national rate of 8.3 %. (Source: Utah Dept of Workforce Services)

• The General Fund budget for the fiscal year-ending June 30, 2013 reflects a decrease from the final budget for the fiscal year-ended June 30, 2012. This decrease in spending is a result of several large capital projects completed during the fiscal year 2012. These Capital Project Fund projects were not budgeted in fiscal year 2013. During fiscal year 2012 the General Fund transferred funds to certain Capital Project Funds. Some increases in individual departments are results in increase personnel and benefits combined with general inflation in the operational portions of the budget. Some capital improvements budgeted for the FY 2013 include:

1. Additional Trail Projects. 2. River Reclamation Projects 3. Water Rights Purchases. 4. Water line replacements. 5. Sewer line replacement. 6. Hardware for new broadband nodes. 7. Storm Drainage System Expansion. 8. Pressurized Irrigation System Expansion. 9. Sidewalk replacement and repair various areas of town. 10. Purchase of City Vehicles.

11

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of Spanish Fork City’s finances for all those with an interest in the City’s finances. Questions concerning any information provided in this report or requests for additional financial information should be addressed to: Finance Director, Spanish Fork City, 40 South Main St, Spanish Fork, UT 84660.

12

Intentionally Left Blank

13

BASIC FINANCIAL STATEMENTS

14


15The Notes to the Financial Statements are an Integral Part of This Statement

Spanish Fork City Statement of Net Assets

June 30, 2012

Governmental Business-typeActivities Activities Totals

ASSETSCash and cash equivalents 2,231,462$ 26,882,037$ 29,113,499$Receivables (net of allowance) 2,635,098 3,826,953 6,462,051Prepaid expenses 23,334 45,660 68,994Internal balances 1,375,898 (1,375,898) -Bond issuance costs (net) - 223,691 223,691Inventory - 1,108,836 1,108,836Equity in joint venture 3,076,527 1,365,544 4,442,071Restricted Assets:

Cash and cash equivalents 5,661,681 1,677,801 7,339,482Capital Assets (not being depreciated): Land 11,924,013 2,427,003 14,351,016

Water shares - 4,458,638 4,458,638Capital Assets (net of accumulated depreciation): Buildings 22,540,243 4,424,373 26,964,616 Improvements other than buildings 15,967,718 103,045,312 119,013,030 Equipment 3,810,321 4,228,795 8,039,116 Infrastructure 32,377,961 - 32,377,961 Total assets 101,624,256 152,338,745 253,963,001

LIABILITIESAccounts payable 1,431,053 605,703 2,036,756Deposits 2,365,469 793,250 3,158,719Connectors agreement - 31,937 31,937Deferred revenue 1,703,594 12,872 1,716,466Deferred amount of refunding - (383,778) (383,778)Compensated absences 1,165,684 492,154 1,657,838Bond interest payable 171,745 18,889 190,634Bond premiums 187,523 136,434 323,957Noncurrent Liabilities: Due within one year 978,312 1,935,000 2,913,312 Due in more than one year 17,820,143 8,840,000 26,660,143 Total liabilities 25,823,523 12,482,462 38,305,985

NET ASSETSInvested in capital assets, net of related debt 67,650,056 108,768,793 176,418,849Restricted for: Class "C" roads 925,086 - 925,086 Redevelopment agency 3,123,480 - 3,123,480

Impact fees - 263,524 263,524Debt Service 381,016 - 381,016Water rights - 454,608 454,608Bond requirements - 959,669 959,669

Unrestricted 3,721,095 29,409,688 33,130,783Total net assets 75,800,733$ 139,856,282$ 215,657,015$

Primary Government

16Th

e N

otes

to th

e Fi

nanc

ial S

tate

men

ts a

re a

n In

tegr

al P

art o

f Thi

s Sta

tem

ent

Span

ish

Fork

City

St

atem

ent o

f Act

iviti

es

For

the

Yea

r E

nded

Jun

e 30

, 201

2

Ope

ratin

gC

apita

lC

harg

es fo

rG

rant

s an

dG

rant

s an

dG

over

nmen

tal

Busi

ness

-type

Func

tion/

Prog

ram

sEx

pens

esSe

rvic

esC

ontri

butio

nsC

ontri

butio

nsAc

tiviti

esAc

tiviti

esTo

tal

Prim

ary

gove

rnm

ent:

Gov

ernm

enta

l act

iviti

es:

Gen

eral

gov

ernm

ent

3,35

6,61

3$

4,

220,

683

$

53

,950

$

-

$

918,

020

$

-$

918,

020

$Pu

blic

saf

ety

5,55

7,59

3

2,

004,

120

78

,830

-

(3,4

74,6

43)

-

(3

,474

,643

)Pu

blic

wor

ks9,

144,

385

-

1,01

8,92

6

3,

674,

054

(4,4

51,4

05)

-

(4

,451

,405

)Pa

rks,

rec.

& p

ublic

pro

perty

7,30

5,34

9

66

6,15

9

21

9,19

6

363,

882

(6

,056

,112

)

-

(6,0

56,1

12)

Inte

rest

on

long

-term

deb

t84

3,33

3

-

-

-

(8

43,3

33)

-

(843

,333

)

Tota

l gov

ernm

enta

l act

iviti

es26

,207

,273

6,89

0,96

2

1,37

0,90

2

4,

037,

936

(13,

907,

473)

-

(13,

907,

473)

Busi

ness

-type

act

iviti

es:

Wat

er

4,92

4,26

2

5,

001,

392

-

67

0,25

8

-

747,

388

74

7,38

8Se

wer

2,73

8,25

5

2,

458,

413

-

75

1,66

7

-

471,

825

47

1,82

5El

ectri

c22

,167

,745

26,0

34,6

34

-

52

4,41

4

-

4,39

1,30

3

4,

391,

303

Gar

bage

1,24

0,67

4

1,

322,

454

-

-

-

81,7

80

81,7

80

G

olf c

ours

e86

7,11

1

726,

219

-

-

-

(1

40,8

92)

(140

,892

)Sw

imm

ing

pool

386,

658

20

3,27

7

-

-

-

(183

,381

)

(1

83,3

81)

Stor

m d

rain

age

1,03

6,77

8

1,

085,

220

-

29

6,49

9

-

344,

941

34

4,94

1G

un c

lub

217,

637

28

3,95

8

-

-

-

66,3

21

66,3

21

Tota

l bus

ines

s-ty

pe a

ctiv

ities

33,5

79,1

19

37

,115

,567

-

2,24

2,83

8

-

5,

779,

286

5,77

9,28

6To

tal p

rimar

y go

vern

men

t59

,786

,392

$

44,0

06,5

29$

1,

370,

902

$ 6,

280,

774

$

(13,

907,

473)

5,77

9,28

6

(8,1

28,1

87)

Gen

eral

reve

nues

:

Prop

erty

taxe

s2,

720,

342

-

2,

720,

342

Sa

les

taxe

s6,

034,

804

-

6,

034,

804

Oth

er ta

xes

588,

700

-

588,

700

U

nres

trict

ed in

vest

men

t ear

ning

s92

,182

164,

430

256,

612

Su

ndry

reve

nues

3,00

0,25

0

-

3,00

0,25

0

Join

t ven

ture

gai

n (lo

ss)

338,

108

(61,

253)

27

6,85

5

Gai

n on

sal

e of

cap

ital a

sset

s(3

0,42

8)

(49,

256)

(7

9,68

4)

Tran

sfer

s5,

331,

106

(5

,331

,106

)

-

To

tal g

ener

al re

venu

es a

nd tr

ansf

ers

18,0

75,0

64

(5,2

77,1

85)

12

,797

,879

C

hang

e in

net

ass

ets

4,16

7,59

0

502,

101

4,

669,

692

Net

ass

ets

- beg

inni

ng71

,633

,143

13

9,35

4,18

1

21

0,98

7,32

3N

et a

sset

s - e

ndin

g75

,800

,733

$

139,

856,

282

$

215,

657,

015

$

Prog

ram

Rev

enue

sPr

imar

y G

over

nmen

tN

et (E

xpen

se) R

even

ue a

nd C

hang

es in

Net

Ass

ets


Spanish Fork City Balance Sheet

Governmental Funds For the Year Ended June 30, 2012

Major MajorCapital Capital TotalProject Project Non-major Total

General Fund Fund Governmental GovernmentalFund North Park Fairgrounds Funds Funds

ASSETSCash and cash equivalents 1,140,433$ -$ 527,209$ 563,820$ 2,231,462$Receivables (net of allowance):

Tax 2,625,173 - - 9,925 2,635,098Due from other funds 470,657 171,898 250,473 1,314,076 2,207,104Prepaid expense 23,334 - - - 23,334Equity in joint venture 79,626 - - - 79,626Restricted Assets:

Cash and cash equivalents 3,097,747 361,819 - 2,202,115 5,661,681 Total assets 7,436,970$ 533,717$ 777,682$ 4,089,936$ 12,838,305$

LIABILITIES AND FUND BALANCESLiabilities:

322,222$ -$ 280,633$ 131,883$ 734,738$Payroll payable 592,215 - - - 592,215Developer escrow 2,015,207 - - - 2,015,207Final inspection deposit 350,262 - - - 350,262Deferred revenue 1,703,594 - - - 1,703,594 Total liabilities 4,983,500 - 280,633 131,883 5,396,016

Fund balances:Non spendable 102,960 - - - 102,960Restricteded for:

Class "C" roads 925,086 - - - 925,086Redevelopment agency - - - 3,123,480 3,123,480Debt Service - - - 381,016 381,016

Committed for:Capital projects - 533,717 497,049 453,557 1,484,323

Unassigned 1,425,424 - - - 1,425,424 Total fund balances 2,453,470 533,717 497,049 3,958,053 7,442,289

7,436,970$ 533,717$ 777,682$ 4,089,936$ 12,838,305$

Accounts payable and accrued liabilities

Total liabilities and fund balances


Spanish Fork City Reconciliation of Total Governmental Fund Balances to

Net Assets of Governmental Activities June 30, 2012

Total fund balances - governmental fund types: 7,442,289$

Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.

City's portion of joint ventures 2,996,901Cost of capital assets 137,257,623Accumulated depreciation (50,637,367)

Net adjustment to increase fund balance - total governmentalfunds to arrive at net assets - governmental activities 89,617,157

Internal Service funds are used by management to charge the cost of motor pool toindividual funds. The assets and liabilitites of the internal service funds are included ingovernmental activities in the statement of net assets, but not in the Balance Sheet - Governmental Funds (988,618)

Long-term liabilities, including bonds payable, are not due and payable in the currentperiod and therefore are not reported in the funds.

Accrued interest payable (171,745) Non-current liabilities due within one year (1,020,143)Compensated absences (1,165,684)Unamortized Bond Premium (187,523) Non-current liabilities due in more than one year (17,725,000)Net adjustment to reduce fund balance - total governmentalfunds to arrive at net assets - governmental activities (20,270,095)

Net assets of government activities 75,800,733$


Spanish Fork City Statement of Revenues, Expenditures, and Changes in Fund Balances

Governmental Funds For the Year Ended June 30, 2012

Major MajorCapital Capital TotalProject Project Non-major Total

General Fund Fund Governmental GovernmentalFund North Park Fairgrounds Funds Funds

REVENUESTaxes 8,405,784$ -$ -$ 938,062$ 9,343,846$ Licenses and permits 595,818 - - - 595,818Intergovernmental revenues 1,370,901 - - - 1,370,901Charges for services 1,722,145 - - - 1,722,145Fines and forfeitures 115,471 - - - 115,471Interest income 87,374 - - 4,808 92,182Sundry revenue 1,489,892 - 3,000,250 975,218 5,465,360

Total revenues 13,787,385 - 3,000,250 1,918,088 18,705,72314,228,127

EXPENDITURESCurrent:

General government 3,366,634 - - - 3,366,634 Public safety 4,936,681 - - - 4,936,681 Public works 6,266,666 - - 465,914 6,732,580 Parks, recreation and public property 2,641,779 - - - 2,641,779

Debt Service:Principal retirement - - - 875,000 875,000 Interest and fiscal charges - - - 863,125 863,125

Capital outlay - 4,684,874 4,003,201 337,724 9,025,799 Total expenditures 17,211,760 4,684,874 4,003,201 2,541,763 28,441,598

Excess revenues over (under)expenditures (3,424,375) (4,684,874) (1,002,951) (623,675) (9,735,875)

Other financing sources (uses)Impact fees 363,882 - - - 363,882Indirect services 1,992,418 - - - 1,992,418Transfers in - 3,300,000 1,500,000 1,488,915 6,288,915Transfers out (957,809) - - - (957,809)

Total other financing sources and uses 1,398,551 3,300,000 1,500,000 1,488,915 7,687,466 Excess of revenues and other sources over (under) expenditures and other uses (2,025,824) (1,384,874) 497,049 865,240 (2,048,409)

Fund balances - beginning of year 4,479,294 1,918,591 - 3,092,813 9,490,698Fund balances - end of year 2,453,470$ 533,717$ 497,049$ 3,958,053$ 7,442,289$


Spanish Fork City Reconciliation of the Statement of Revenues, Expenditures and Changes in

Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2012

Amounts reported for governmental activities in the statement of activities aredifferent because:

Net changes in fund balances - total governmental funds (2,048,409)$

Governmental funds report capital outlays as expenditures. However, in thestatement of activities the cost of those assets is allocated over their estimateduseful lives and reported as depreciation expense. This is the amount by whichcapital outlays exceeded depreciation in the current period.

Capital Outlay 5,355,456 Depreciation Expense (4,217,727)

Net adjustment to increase net changes in fund balances-total governmental funds to arrive at changes in net assetsof governmental activities 1,137,729

The net effect of various miscellaneous transations in volving capital assets(i.e., sales, trade-ins, and donations) is to increase (decrease) net assets.

Governmental funds only report the disposal of fixed assets to the extent proceeds are received from the sale. In the statement of activities, a gain or loss is reported for each disposal. This is theamount that proceeds exceed the gain on the statement of activities. (30,488)

The statement of activities reports capital contributions fromdevelopers as revenue. Conversely, governmental fundsdo not report any capital contibutions from developers as revenue. 3,674,054

3,643,566

Internal service funds are used by management to charge the cost of motor pool toindividual funds. The net revenue of certain activities of internal service funds arereported with the governmental activities. 233,916

The issuance of long-term debt (e.g., bonds, leases) provides current financialresources to governmental funds, while the repayment of the principal oflong-term debt consumes the current financial resources of governmental funds.Neither transaction, however, has any effect of net assets. This amount is the neteffect of these differences in the treatment of long-term debt and related items. 894,792

Some revenues expenses reported in the statement of activities do not add to or requirethe use of current financial resources and, therefore, are not reported as revenuesor expenditures in the governmental funds. Change in compensated Absences (32,112)

Change in net assets of governmental activities 4,167,590$


Spanish Fork City Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual

General Fund For the Year Ended June 30, 2012

Variancewith Final

Actual BudgetOriginal Final Amounts Over(Under)

REVENUESTaxes 7,749,580$ 8,265,962$ 8,405,784$ 139,822$ Licenses and permits 492,000 586,800 595,818 9,018 Intergovernmental revenues 1,278,544 1,448,192 1,370,901 (77,291) Charges for services 1,504,500 1,619,875 1,722,145 102,270 Fines and forfeitures 153,000 107,000 115,471 8,471 Interest income 55,250 79,100 87,374 8,274 Sundry revenue 1,376,813 1,449,796 1,489,892 40,096

Total revenues 12,609,687 13,556,725 13,787,385 230,660

EXPENDITURESCurrent:

General government 3,507,927 3,388,241 3,366,634 (21,607) Public safety 5,069,112 5,374,116 4,936,681 (437,435) Public works 6,286,651 7,096,736 6,266,666 (830,070) Parks, recreation and public property 2,580,944 2,761,455 2,641,779 (119,676) Total expenditures 17,444,634 18,620,548 17,211,760 (1,408,788)

Excess revenues over (under)expenditures (4,834,947) (5,063,823) (3,424,375) 1,639,448

Other financing sources (uses)Sale of fixed assets 30,000 500 60 (440) Impact fees - - 363,882 363,882 Indirect services 1,893,692 1,992,358 1,992,418 60 Transfers in 1,596,157 1,592,580 - (1,592,580) Transfers out (1,620,165) (957,809) (957,809) -

Total other financing sources and uses 1,899,684 2,627,629 1,398,551 (1,229,078) Excess of revenues and other sources over (under) expenditures and other uses (2,935,263) (2,436,194) (2,025,824) 410,370

Fund balances - beginning of year 4,479,294 4,479,294 4,479,294 - Fund balances - end of year 1,544,031$ 2,043,100$ 2,453,470$ 410,370$

Budgeted Amounts


Spanish Fork City Statement of Net Assets – Proprietary Funds

As of June 30, 2012 Governmental

Activites -Non Major Internal Service

Water Sewer Electric Enterprise Funds Total FundASSETSCurrent assets: Cash and cash equivalents 1,133,129$ 8,503,897$ 12,189,871$ 5,055,140$ 26,882,037$ -$

Accounts receivable 542,599 235,907 2,763,273 329,982 3,871,761 - Allowance for doubtful accounts (9,408) (2,825) (30,357) (2,218) (44,808) - Due from other funds 854,270 4,040,138 6,147,300 2,789,593 13,831,301 - Prepaid Expense - - 45,656 - 45,656 - Inventory 4,500 3,500 1,061,766 39,070 1,108,836 -

Total current assets 2,525,090 12,780,617 22,177,509 8,211,567 45,694,783 - Noncurrent assets:

Restricted cash and equivalents 664,984 - 749,293 263,524 1,677,801 - Capital Assets:

Land 280,483 1,009,568 853,156 283,796 2,427,003 - Water rights 4,458,638 - - - 4,458,638 - Buildings 2,429,715 512,049 3,203,438 752,255 6,897,457 205,920 Improvements 65,039,425 32,059,573 40,978,611 15,970,799 154,048,408 - Equipment 2,858,156 2,383,309 2,333,808 1,082,754 8,658,027 10,149,436

Less: accumulated depreciation (22,767,255) (15,048,885) (13,804,668) (6,284,601) (57,905,409) (7,197,855) Other Assets:

Equity in joint venture - - - 1,365,544 1,365,544 - Deferred bond costs 139,610 - 84,081 - 223,691 -

Total noncurrent assets 53,103,756 20,915,614 34,397,719 13,434,071 121,851,160 3,157,501 Total assets 55,628,846$ 33,696,231$ 56,575,228$ 21,645,638$ 167,545,943$ 3,157,501$

LIABILITIESCurrent liabilities:

Due to other funds 2,148,334$ 6,405,302$ 1,717,078$ 5,141,759$ 15,412,473$ 625,932$ Accounts payable 179,332 19,243 214,665 192,463 605,703 101,886 Accrued interest payable 18,889 - - - 18,889 2,214 Compensated absences payable 71,455 59,629 295,785 65,285 492,154 27,424 Customer deposits 16,626 - 441,574 - 458,200 - Final inspection deposits - - 335,050 - 335,050 -

Lease payable - current portion - - - - - 53,312 Bonds payable - current portion 1,160,000 - 775,000 - 1,935,000 - Total current liabilities 3,594,636 6,484,174 3,811,090 5,399,507 19,289,407 810,768

Noncurrent liabilities:Deferred revenue 6,000 1,872 - 5,000 12,872 - Lease Payable - - - - - 95,143 Bonds payable 6,380,000 - 2,460,000 - 8,840,000 - Bond premiums 136,434 - - - 136,434 - Deferred amount of refunding (383,778) - - - (383,778) - Total noncurrent liabilities 6,138,656 1,872 2,460,000 5,000 8,605,528 95,143 Total liabilities 9,733,292 6,486,046 6,271,090 5,404,507 27,894,935 905,911

NET ASSETS

44,969,538 20,915,614 31,078,638 11,805,003 108,768,793 3,157,501 Restricted for:

Impact fees - - - 263,524 263,524 - Water rights 454,608 - - - 454,608 - Bond requirements 210,376 - 749,293 - 959,669 -

Unrestricted 261,032 6,294,571 18,476,207 4,172,604 29,204,414 (905,911) Total net assets 45,895,554$ 27,210,185$ 50,304,138$ 16,241,131$ 139,651,008 2,251,590$

Adjustment to reflect the consolidation of internal service fund activities related to enterprise fund: 205,274 Net assets from business-type activities: 139,856,282$

Business-Type Activities - Enterprise Funds

Invested in capital assets, net of related debt


Spanish Fork City Statement of Revenues, Expenses, and Changes in Fund Net Assets

Proprietary Fund For the Year Ended June 30, 2012

GovernmentalActivities-

Non Major Total Internal ServiceWater Sewer Electric Enterprise Funds Enterprise Funds Fund

Operating Revenues: Charges for sales and services 4,863,140$ 2,310,003$ 24,874,771$ 3,367,283$ 35,415,197$ 2,279,646$ Other income 138,252 148,410 1,159,863 253,845 1,700,370 34,573 Total operating revenues 5,001,392 2,458,413 26,034,634 3,621,128 37,115,567 2,314,219Operating Expenses:

Water assessment 64,816 - - - 64,816 -Power purchases - - 12,338,655 - 12,338,655 -Landfill fees - - - 1,114,464 1,114,464 -Employee salaries 748,946 583,316 2,685,682 1,013,278 5,031,222 244,967Materials and supplies 256,719 110,023 1,199,151 267,658 1,833,551 461,656Repairs and maintenance 51,460 40,886 115,852 94,092 302,290 285,955Professional services 102,619 93,179 2,727,713 125,624 3,049,135 11,334Motorpool charges 153,322 112,376 293,264 257,122 816,084 -Utilities 289,004 154,852 77,062 76,941 597,859 12,584Insurance 16,146 39,600 37,135 22,074 114,955 1,484Depreciation 2,233,490 1,141,355 1,204,637 438,139 5,017,621 869,471Amortization 124,277 - 21,527 - 145,804 -Indirect services 629,433 457,424 532,791 372,710 1,992,358 -Plant assessment 136,284 9,567 741,892 - 887,743 -Sundry charges 18,099 19,914 151,030 17,929 206,972 -

Total operating expenses 4,824,615 2,762,492 22,126,391 3,800,031 33,513,529 1,887,451 Operating income 176,777 (304,079) 3,908,243 (178,903) 3,602,038 426,768Nonoperating revenues (expenses):

Interest revenue 7,074 - 157,356 - 164,430 -Impact fees and water right fees 272,419 226,014 308,404 153,113 959,950 -

Change in joint venture equity - - - (61,253) (61,253) -Contributions from private contractors 397,839 525,653 216,010 143,386 1,282,888 -Gain(loss) on sale of fixed assets - - (49,256) - (49,256) (5,529)Interest expense (142,727) - (102,024) - (244,751) (8,163)

Total nonoperating revenues (expenses) 534,605 751,667 530,490 235,246 2,052,008 (13,692)

Income (loss) before operating transfers 711,382 447,588 4,438,733 56,343 5,654,046 413,076Operating Transfers from (to) Other Funds

Operating transfers in - - - 347,076 347,076 -Operating transfers out - - (5,678,182) - (5,678,182) -

Total contributions and operating transfers - - (5,678,182) 347,076 (5,331,106) -

Change in net assets 711,382 447,588 (1,239,449) 403,419 322,940 413,076 Total net assets - beginning 45,184,172 26,762,597 51,543,587 15,837,712 139,328,068 1,838,514 Total net assets - ending 45,895,554$ 27,210,185$ 50,304,138$ 16,241,131$ 2,251,590$

Adjustment to reflect the consolidation of internal service fund activities related to enterprise fund: 179,161Change in net assets of business-type activities: 502,101$



Spanish Fork City Statement of Cash Flows

Proprietary Fund For the Year Ended June 30, 2012

Non Major TotalWater Sewer Electric Enterprise EnterpriseFund Fund Fund Funds Funds

Cash Flows From Operating ActivitiesReceipts from customers 4,528,804$ 2,308,651$ 24,044,531$ 3,274,979$ 34,156,965$Other cash receipts 138,252 148,410 1,159,863 253,845 1,700,370 Interfund services provided 141,868 - 500,655 - 642,523 Payments to suppliers (1,653,395) (1,071,521) (17,964,435) (2,356,627) (23,045,978) Payments to employees (737,831) (576,772) (2,677,948) (1,002,506) (4,995,057)

Net cash provided (used) by operating activities 2,417,698 808,768 5,062,667 169,691 8,458,824

Cash Flows From NoncapitalFinancing ActivitiesDecrease (increase) in due from other funds (201,619) (962,650) (264,618) (565,335) (1,994,222) Increase (decrease) in due to other funds 809,394 479,297 60,451 748,679 2,097,821 Transers in (out) - - (5,678,182) 347,076 (5,331,106)

Net cash provided (used) by noncapital activities 607,775 (483,353) (5,882,349) 530,420 (5,227,507)

Cash Flows From Capital and Related Financing Activities

Purchases of capital assets (4,133,707) (939,124) (1,984,391) (1,663,038) (8,720,260) Principal paid on capital debt 812,000 - (745,000) - 67,000 Interest paid on capital debt (142,727) - (102,024) - (244,751) (Increase) decrease in deferred amount on refunding (81,106) - 84,081 - 2,975 Contributions from (reimbursements to) private contractors 397,839 525,653 216,010 143,386 1,282,888 Impact fees collected 272,419 226,014 308,404 153,113 959,950

Net cash provided (used) by capital and related financing activities (2,875,282) (187,457) (2,222,920) (1,366,539) (6,652,198)

Cash Flows From Investing ActivitiesInterest and dividends received 7,074 - 157,356 - 164,430 Increase (decrease) in unamortized bond premiums (27,282) - - - (27,282)

Net cash provided (used) by investing activities (20,208) - 157,356 - 137,148

Net increase (decrease) in cash and cash equivalents 129,983 137,958 (2,885,246) (666,428) (3,283,733) Cash and cash equivalents, July 1 1,668,130 8,365,939 15,824,410 5,985,092 31,843,571 Cash and cash equivalents, June 30 1,798,113$ 8,503,897$ 12,939,164$ 5,318,664$ 28,559,838$Reconciliation of operating income to net cash provided (used) by operating activities:

Operating income 176,777$ (304,079)$ 3,908,243$ (178,903)$ 3,602,038Adjustments to reconcile operating income to net cash provided (used) by operating activities:

Depreciation expense 2,233,490 1,141,355 1,204,637 438,139 5,017,621 Amortization expense 124,277 - 21,527 - 145,804 (Increase) decrease in accounts receivable (192,467) (1,351) (329,585) (92,301) (615,704) Decrease (increase) in inventory - - 293,124 7,698 300,822 Increase (decrease) in accrued liabilities 64,507 (33,700) 44,064 (15,714) 59,157 Increase (decrease) in compensated absences 11,115 6,544 7,734 10,772 36,165 Increase (decrease) in customer deposits - - (87,078) - (87,078) Increase (decrease) in deferred revenue (1) (1) - - (2)

Total adjustments 2,240,921 1,112,847 1,154,424 348,594 4,856,786 Net cash provided (used) by operating activities 2,417,698$ 808,768$ 5,062,667$ 169,691$ 8,458,824$



Spanish Fork City Statement of Net Assets

Fiduciary Fund As of June 30, 2012

FireRetirement

Capital FundASSETSCash and equivalents 56,145$

Total assets 56,145


Accounts payable 62 Total liabilities 62

Fund Balances:Deferred compensation 56,083

Total fund balances 56,083 Total liabilities and fund balance 56,145$


Spanish Fork City Statement of Changes in Net Assets

Fiduciary Fund For the Year Ended June 30, 2012

FireRetirement

Capital FundREVENUES:

Employer contribution 17,000$Interest income 671 Total 17,671

EXPENDITURES:Retirement payments 17,616 Total 17,616

Excess of revenues over (under) expenditures 55

Fund balances - beginning of year 56,028Fund balances - end of year 56,083$

SPANISH FORK CITY NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2012

27

INDEX

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Financial Reporting Entity B. Government-wide and Fund Financial Statements C. Measurement Focus and Basis of Accounting D. Assets, Liabilities, and Equity E. Revenues, Expenditures, and Expenses

NOTE 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Deposits and Investments Laws and Regulations B. Revenue Restrictions C. Debt Restrictions and Covenants D. Budgets and Budgetary Accounting E. Fund Balance

NOTE 3. DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS A. Cash and Investments B. Restricted Assets C. Accounts Receivable D. Capital Assets E. Accounts Payable F. Long-term Debt G. Interfund Transactions and Balances H. Reserved Fund Balances and Net Assets

NOTE 4. OTHER NOTES A. Employee Pension and Other Benefit Plans B. Risk Management C. Commitments and Contingencies D. Joint Ventures E. Water Loan Program F. Spanish Fork Redevelopment Agency G. Subsequent Events


28

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City complies with generally accepted accounting principles (GAAP) as applied to government agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The accounting and reporting framework and the more significant accounting policies are discussed in subsequent subsections of this Note.

1.A. FINANCIAL REPORTING ENTITY

The City of Spanish Fork was incorporated in 1855 under the laws of the State of Utah.The city operates under a Mayor-Council form of government. The City provides municipal services under the following organizational structure.

Mayor and City Council: Mayor and City Council, Community Promotion, and Advisory Boards and Commissions.

City Administration: City Administrator, Risk Management, Emergency Operations, Recorder, Community and Neighborhood, and Computer Services.

Financial Services: Finance Director, Treasurer, Utilities, Accounting, Facilities, and Purchasing.

City Attorney: Legal Services, Prosecution, Civil and Environmental Law, and Personnel.

Development Services: Economic Development, Planning and Zoning and Code Enforcement and Building Inspections,.

Public Safety: Police, Fire, Ambulance, Animal Control and Justice Center.

Public Works: Streets, Engineering, Parks, Fleet Maintenance, Culinary Water and Pressurized Irrigation Services, Sewer Services, Electric and Broadband Services, Solid Waste Services, Street Lighting and Storm Drainage Services.

Recreation: Swimming Pool, Recreation Programs, Building and Grounds, Golf Course, Gun Club, Senior Center, Special Events and Arts Council Programs.

Library: Library Administration and Public Services.

The City is a municipal corporation governed by an elected five-member Council and Mayor. As required by generally accepted accounting principles, these financial statements present the City (primary government) and its component units, entities for


29

which the government is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of the government’s operations and so data from these units are combined with data of the primary government. The component units discussed below are included in the City’s reporting entity because of the significance of their operational or financial relationships with the City.

The Redevelopment Agency is governed by a separate governing board, who are the City’s Mayor and Council. The financial statements of the Redevelopment Agency are included in the accompanying financial statements as a blended component unit as a Special Revenue Fund.

1.B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

Government-wide Financial Statements: The Statement of Net Assets and Statement of Activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. For the most part, the effect of inter-fund activity has been removed from these statements. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function, or segment, are offset by program revenues. Program revenues are those that are clearly identifiable with a specific function or segment. Programs revenues include 1) charges to customers or applicants who purchase, use directly or benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Fund Financial Statements:

Fund financial statements of the reporting entity are organized into funds, each of which is considered to be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditure/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria:

a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type; and


30

b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.

The funds of the financial reporting entity are described below:

Governmental Funds General Fund

The General Fund is the primary operating fund of the City and always classified as a major fund. It is used to account for all activities except those legally or administratively required to be accounted for in other funds.

Debt Service Fund The Debt Service Fund account for the resources accumulated and payments made for principal and interest on long-term general-obligation debt of governmental funds.

Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for certain purposes. The reporting entity reports the Redevelopment Fund (RDA) as a Special Revenue Fund.

Capital Project Fund The Capital Project Fund is used to account for resources designated for the acquisition or construction of specific capital projects or items. The reporting entity includes only four Capital Project Funds and it is used to account for the acquisition of capital assets with transfers made from other funds. The reporting entity includes the Major Capital Project funds of North Park Development and Fairgrounds fund. The reporting entity also includes the Non-Major Governmental fund of River Reclamation fund and Street Cut Bridge fund.

Proprietary Fund Enterprise Fund

Enterprise funds are used to account for business-like activities provided to the general public. These activities are financed primarily by user charges and the measurement of financial activity focuses on net income measurement similar to the private sector. The reporting entity includes the Water, Sewer, Electric, Garbage, Golf Course, Swimming Pool, Storm Drainage, and Gun Club funds.


31

Internal Service Fund Internal Service Funds account for fleet management services provide to other departments or agencies of the government on a cost reimbursement basis.

Major and Nonmajor Funds The funds are further classified as major or non-major as follows:

Fund Brief Description Major: General See above for description. Capital Projects Fund– North Park Development.

Capital Projects Fund - Fairgrounds

Accounts for the accumulation of funds, revenues and expenditures on projects such as the North Park Development. Accounts for the accumulation of funds, revenues and expenditures on the construction of a new outdoor arena.

Enterprise Funds: Water, Sewer and Electric Accounts for revenues and expenditures of

water, sewer and electric utilities. These funds also account for the accumulation of resources for, and the payment of, long term debt principal and interest associated with these utilities. All costs are financed through charges to customers with rates reviewed regularly and adjusted, if necessary, to ensure the integrity of the funds. Water Fund consists of culinary and secondary water systems. Electric Fund consists of electric and broadband systems. Sewer Fund consists of sewer collections and sewer plant systems.

Nonmajor Governmental Funds: Debt Service Fund The Debt Service Fund account for the

resources accumulated and payments made for principal and interest on long-term general-obligation debt of governmental funds.

Special Revenue Fund (RDA) Accounts for activity within the City’s

redevelopment agency. Capital Projects Fund Accounts for the accumulation of funds,

revenues and expenditures on projects such as the River Reclamation Project and Street Cut Bridge.


32

Nonmajor Enterprise Funds: Garbage Fund Accounts for revenues and expenditures of

the garbage utility. Golf Course Fund Accounts for revenues and expenditures of

Spanish Oaks Golf Course. Swimming Pool Fund Accounts for revenues and expenditures of

the swimming pool. Storm Drainage Fund Accounts for revenues and expenditures of

storm drainage utility. Gun Club Fund Accounts for revenues and expenditures of

the gun club.

Internal Service Funds: Motor Pool This fund is used to account for the costs of

operating and maintaining vehicles and equipment owned by the City.

1.C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING

Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied.

Measurement Focus On the government-wide Statement of Net Assets and the Statement of Activities, both governmental and business-like activities are presented using the economic resources measurement focus as defined in item b. below.

In the fund financial statements, the “current financial resources” measurement focus or the “economic resources” measurement focus is used as appropriate:

a. All governmental funds utilize a “current financial resources” measurement focus. Only current financial assets and liabilities are generally included ontheir balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period.

b. The proprietary fund utilizes an “economic resources” measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net assets (or cost recovery), financial position,


33

and cash flows. All assets and liabilities (whether current or noncurrent) associated with their activities are reported. Proprietary fund equity is classified as net assets.

c. Agency funds are not involved in the measurement of results of operations; therefore, measurement focus is not applicable to them.

Basis of Accounting In the government-wide Statement of Net Assets and Statement of Activities, both governmental and business-like activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.

In the fund financial statements, governmental funds and agency funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable and available.” Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or within sixty days after year end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond principal and interest which are reported when due.

All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. The proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principle ongoing operations.

Sales taxes, use taxes, franchise taxes, and earned but un-reimbursed state and federal grant associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period. Property taxes are measurable as of the date levied (assessed) and are recognized as revenue when they become available. Available means when due, or past due and received within the current period or collected soon enough thereafter to be used to pay liabilities of the current period. All other revenues are considered to be measurable and available only when the City receives cash.

As a general rule, the effect of inter-fund activity has been eliminated from the government financial statements. Exceptions to this general rule are payments to the general fund by various enterprise funds for the providing of administrative and billing services for such funds. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Another exception is the plant assessment charged by the electric fund to the water and sewer funds for the use of assets owned by the electric fund.


34

1.D. ASSETS, LIABILITIES, AND EQUITY

Cash and Investments For the purpose of the Statement of Net Assets, “cash, including time deposits” includes all demand, savings accounts, and certificates of deposits of the City. For the purpose of the proprietary fund Statement of Cash Flows, “cash and cash equivalents” include all demand and savings accounts, and certificates of deposit or short-term investments with an original maturity of three months or less. Investments of the promissory note trustee accounts are not considered cash equivalents.

Investments are carried at fair value except for short-term U.S. Treasury obligations with a remaining maturity at the time of purchase of one year or less. Those investments are reported at amortized cost. Fair value is based on quoted market price. Additional cash and investment disclosures are presented in Notes 2.A. and 3.A.

Interfund Receivables and Payables During the course of operations, numerous transactions occur between individual funds that may result in amounts owed between funds. Those related to goods and services type transactions are classified as “due to” and “due from” other funds. Short-term interfund loans are reported as “interfund receivables and payables.” Long-term interfund loans (noncurrent portion) are reported as “advances from and to other funds.” Interfund receivables and payables between funds within governmental activities are eliminated in the Statement of Net Assets. See Note 3.G. for details of interfund transactions, including receivables and payables at year-end.

Receivables In the government-wide statements, receivables consist of all revenues earned at year-end and not yet received. Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable. Major receivable balances for the governmental activities include property taxes, sales and use taxes and franchise taxes. Business-type activities report utilities billings as their major receivables.

In the fund financial statements, material receivables in governmental funds include revenue accruals such as sales tax, franchise tax, and grants and other similar intergovernmental revenues since they are usually both measurable and available. Non-exchange transactions collectible but not available are deferred in the fund financial statements in accordance with modified accrual, but not deferred in the government-wide financial statements in accordance with the accrual basis. Interest and investment earnings are recorded when earned only if paid within 60 days since they would be considered both measurable and available. Proprietary fund material receivables consist of all revenues earned at year-end and not yet received. Utility accounts receivable and interest earnings compose the majority of proprietary fund receivables. Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable.


35

Inventories and prepaid items

All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements.

Restricted assets

Cash, which is restricted to a particular use due to statutory, budgetary or bonding requirements, is classified as “restricted cash” on the Statement of Net Assets and on the Balance Sheets.

Capital Assets The accounting treatment over property, plant, and equipment (capital assets) depends on whether the assets are used in governmental fund operations or proprietary fundoperations and whether they are reported in the government-wide or fund financial statements.

Government-wide Statements In the government-wide financial statements, capital assets are accounted for as capital assets. Capital assets are defined by the City as assets with an initial individual cost of more than $5,000 and an estimated useful life in excess of two years. All capital assets are valued at historical cost or estimated historical cost if actual is unavailable, except for donated capital assets that are recorded at their estimated fair value at the date of donation.

Prior to July 1, 2002, governmental funds’ infrastructure assets were not capitalized. These assets have been valued at estimated historical cost.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the assets’ estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows:


36

Description YearsBuildings and structures 30-50

Improvements other than buildings 20-50

Machinery and equipment 5-10

Furniture and fixtures 5-10 Infrastructure 20-40

Fund Financial Statements In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the government-wide statements.

Restricted Assets Restricted assets include cash and investments of the proprietary fund that are legally restricted as to their use. The primary restricted assets are related to promissory note trustee accounts and utility meter deposits.

Long-term Debt The accounting treatment of long-term debt depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements.

All long-term debt to be repaid from governmental and business-type resources are reported as liabilities in the government-wide statements. The long-term debt consists primarily of bonds and notes payable, and accrued compensated absences.

Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The debt proceeds are reported as other financing sources and payment of principle and interest reported as expenditures. The accounting for proprietary fund is the same in the fund statements as it is in the government-wide statements.

Compensated Absences The City’s personnel policies permits departmental heads to accumulate up to 480 hours and other employees to accumulate up to 120 hours of earned, but unused, vacation time. Accumulated vacation time will be paid to employees upon termination. Accumulated sick leave is paid upon termination or retirement at a rate of between 25% and 33% of the accumulated amount. The accrued liability is based on a 28% rate.


37

At June 30, 2012, the total liability for accrued vacation pay and the total liability for accrued sick leave is as follows:

Governmental Business -TypeActivities Activities Total

Vacation Liability 717,802$ 296,031$ 1,013,833$Sick Leave Liability 447,882 196,123 644,005 Total Compensated Absences 1,165,684$ 492,154$ 1,657,838$

Liability Amount

The liability for these compensated absences is recorded as long-term debt in the government-wide statements. In the fund financial statements, governmental funds report only the compensated absence liability payable from expendable available financial resources, while the proprietary funds report the liability as it is incurred.

Equity Classifications

Government-wide Statements Equity is classified as net assets and displayed in three components:

a. Invested in capital assets, net of related debt—Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

b. Restricted net assets—Consists of net assets with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net assets—All other net assets that do not meet the definition of “restricted” or “invested in capital assets, net of related debt.”

Fund Statements

In the fund financial statements governmental fund equity is classified as fund balance. Fund balance is further classified as Nonspendable, Restricted, Committed, Assigned or Unassigned. Descriptions of each follow:

Nonspendable fund balance - Amounts that cannot be spent because they are either (a) not in spendable form, or (b) legally or contractually required to be maintained intact.

Restricted fund balance - Amounts restricted by enabling legislation. Also reported if, (a) externally imposed by creditors, grantors, contributors, or laws regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation.


38

Committed fund balance - Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision making authority, which is the City Council.

Assigned fund balance - Amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. Also includes all remaining amounts that are reported in governmental funds, other than the general fund that are not classified as nonspendable, restricted nor committed or in the General Fund, that are intended to be used for specific purposes. The role of assigning fund balance resides with the City Council.

Unassigned fund balance - Residual classification of the General Fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund.

When both restricted and unrestricted fund balance is available for use, it is the City’s policy to first use restricted fund balance, then committed funds, followed by assigned and then unassigned funds.

Proprietary fund equity is classified the same as in the government-wide statements.

See Note 3.H. for additional disclosures.

1.E. REVENUES, EXPENDITURES, AND EXPENSES

Sales Tax Sales taxes are collected by the Utah State Tax Commission and are remitted to the City monthly. Sales taxes collected and held by the state at year-end on behalf of the City are also recognized as revenue.

Property Tax Property taxes are based on the assessments against property owners. Tax levies on such assessed values are certified to Utah County prior to the commencement of the fiscal year. Property taxes become a lien on January 1 and are levied on the first Monday in August. Taxes are due and payable on November 1, and are delinquent after November 30 of each year. Property taxes are collected by the Utah County Treasurer and remitted to the City shortly after collection. The real property taxes that are due in November are reported as a receivable from property taxes on the financial statements. Because these taxes are not considered available to liquidate liabilities of the current period, they are offset by deferred revenue.

Operating Revenues and Expenses Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and/or services. It also includes


39

all revenue and expenses not related to capital and related financing, noncapital financing, or investing activities.

Expenditures/ExpensesIn the government-wide financial statements, expenses are classified by function for both governmental and business-type activities.

In the fund financial statements, expenditures are classified as follows:

Governmental Funds—By Character: Current (further classified by function)

Debt Service Capital Outlay

Proprietary Fund—By Operating and Non-operating

In the fund financial statements, governmental funds report expenditures of financial resources. Proprietary funds report expenses relating to use of economic resources.

Interfund Transfers Permanent reallocations of resources between funds of the reporting entity are classified as interfund transfers. For the purposes of the Statement of Activities, all interfund transfers between individual governmental funds and between individual business-type funds have been eliminated.

Use of estimates Presenting financial statements in conformity with Generally Accepted Accounting Principles requires management to make certain estimates concerning assets, liabilities, revenues and expenses. Actual results may vary from these estimates.

NOTE 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

By its nature as a local government unit, the City is subject to various federal, state, and local laws and contractual regulations. An analysis of the City’s compliance with significant laws and regulations and demonstration of its stewardship over City resources follows.


40

2.A. DEPOSITS AND INVESTMENTS LAWS AND REGULATIONS

The City maintains a cash and investment pool that is available for use by all funds. In addition, investments are separately held by several of the City funds. Deposits are not collateralized nor are they required to be by State statute.

The City follows the requirements of the Utah Money Management Act (Utah Code Annotated 1953, Section 51, Chapter 7) in handling its depository and temporary investment transactions. This law requires the depositing of City funds in a "qualified depository." The Act defines a "qualified depository" as any financial institution whose deposits are insured by an agency of the federal government and which has been certified by the Commissioner of Financial Institutions as meeting the requirements of the Act and adhering to the rules of the Utah Money Management Council.

The Act also defines the types of securities allowed as appropriate investments for the City and the conditions for making investment transactions. Investment transactions may be conducted through qualified depositories, certified dealers, or directly with issuers of the investment securities.

Statutes authorize the City to invest in negotiable or non-negotiable deposits of qualified depositories and permitted negotiable depositories; repurchase and reverse repurchase agreements; commercial paper that is classified as “first tier” by two nationally recognized statistical rating organizations, one of which must be Moody’s Investor Services or Standard & Poor’s bankers’ acceptances; obligations of the United States Treasury including bills, notes, and bonds; bonds, notes, and other evidence of indebtedness of political subdivisions of the State; fixed rate corporate obligations and variable rate securities rated “A” or higher, or the equivalent of “A” or higher, by twonationally recognized statistical rating organizations; shares or certificates in a money market mutual fund as defined by the Act; and the Utah Public Treasurers’ Investment Fund.

The Utah Public Treasurers’ Investment Fund (UPTIF) is an external deposit and investment pool wherein governmental entities are able to pool the monies from several entities to improve investment efficiency and yield. UPTIF is not registered with the SEC as an investment company. The UPTIF is authorized and regulated by the Utah Money Management Act. The Act establishes the Money Management Council, which oversees the activities of the State Treasurer and the UPTIF and details the types of investments that are authorized. UPTIF operates and reports to participants on an amortized cost basis. The income, gains, and losses, net of administration fees, of the UPTIF are allocated to participants on the ratio of the participant’s average daily balance. The fair value of the UPTIF investment pool is approximately equal to the value of pool shares. The UPTIF financial statements are included in the Comprehensive Annual Financial Report for the State of Utah. The financial report is available on the State’s website.


41

Certain assets are restricted by provisions of the revenue bond resolutions. The resolutions also describe how these restricted assets may be deposited and invested.Restricted cash may only be deposited in state or national banks meeting certain minimum net worth requirements or invested in securities representing direct obligations of or obligations guaranteed by the U.S. government, agencies of the U.S. government, any state within the territorial United States of America, repurchase agreements or interest bearing time deposits with state or national banks meeting certain minimum net worth requirements, or certain other investments.

2.B. REVENUE RESTRICTIONS

The City has various restrictions placed over certain revenue sources from state or local requirements. The primary restricted revenue sources include:

Revenue Source Legal Restrictions of Use Sales Tax See Note 1.E. Water and Electric Revenue Debt Service and Utility Operations Impact Fee Revenue Capital Improvements B & C Road Funds Eligible B & C Roads

For the year ended June 30, 2012, the City complied, in all material respects, with these revenue restrictions.

2.C. DEBT RESTRICTIONS AND COVENANTS

General Obligation Debt No debt in excess of total revenue for the current year shall be created by any city unless the proposition to create such debt shall have been submitted to a vote of qualified electors. Cities shall not contract for debt to an amount exceeding four percent of the fair market value of taxable property in their jurisdictions. For the year ended June 30, 2012, the City had no general obligation debt.

Other Long-term Debt Cities may incur a larger indebtedness for the purpose of supplying such city water, sewer, or electricity when such public works are owned and controlled by the municipality. The additional indebtedness shall not exceed four percent for first and second class cities and eight (8%) percent for third class cities. For the year ended June 30, 2012, the City had $29,573,455 of such indebtedness.

Bonds Payable The various loan agreements relating to the notes payable issuances contain some restrictions or covenants that are financial related. These include covenants such as debt service coverage requirement and required reserve account balances. The following schedule presents a brief summary of the most significant requirements and the Authority’s level of compliance thereon as of June 30, 2012.


42

Requirement Level of Compliance

a. Bonds Payable Coverage: 1. Net electric and water operating revenues (excluding depreciation) must

equal 1.10 and 1.25 times the annual debt service plus the unfunded portion of the Debt Service Reserve Requirement to be due and payable for the forthcoming year on the 2000 Electric Revenue Bonds, the 2002 Water Revenue Bonds and 2011 Water Revenue Bonds. Sales tax Revenue Bond 2007 must equal 2.0 times the annual debt service.

b. Reserve Account Requirement: Various escrows are set up as reserves to make the annual debt payments. Minimum balances are required to be kept in each of the escrows.

2.D. BUDGETS AND BUDGETARY ACCOUNTING

Annual budgets are prepared and adopted in accordance with the Uniform Fiscal Procedures Act adopted by the State of Utah. Once a budget has been adopted, it remains in effect until it has been formally revised. Furthermore, in accordance with state law, all appropriations lapse at the end of the budget year. If any obligations are contracted for and are in excess of adopted budget, they are not a valid or enforceable claim against the City. Budgets are adopted on a basis consistent with generally accepted accounting principles. All funds of the City have legally adopted budgets.

The City adheres to the following procedures in establishing the budgetary data reflected in the financial statements.

A. On or before the first regularly scheduled meeting of the City Council in May, the City administrator, authorized under state statute to be appointed budget officer, submits a proposed operation budget. The operating budget includes proposed expenditures and the means of financing them.

B. A public hearing is held at which time the taxpayers’ comments are heard. Notice of the hearing is given in the local newspaper at least seven days prior to the hearing. Copies of the proposed budget are made available for public inspection ten days prior to the public hearing.

C. On or before June 22nd, a final balanced budget must be adopted through passage of a resolution for the subsequent fiscal year beginning July 1st.

D. Control of budgeted expenditures is exercised, under state law, at the departmental level. The City Administrator, however, acting as budget


43

officer, has the authority to transfer budget appropriations between line items within any department of any budgetary fund. The City Council, by resolution, has the authority to transfer budget appropriations between the individual departments of any budgetary fund.

E. Budget appropriations for any department may be reduced by resolution.

F. A public hearing as required in B above must be held to increase the total appropriations of any one governmental fund type; however, after the original public hearing, operating and capital budgets of proprietary fund types may be increased by resolution without an additional hearing.

G. Encumbrances lapse at year end. Encumbered amounts carry over to the following year and are subject to re-appropriation. Therefore, no encumbrances are presented in the financial statements.

During the budget year, the City modified the budget on several occasions using the above procedures.

2.E. FUND EQUITY RESTRICTIONS

Utah Code 10-6-116(4) indicates only the “fund balance in excess of 5% of total revenues of the general fund may be utilized for budget purposes.” The remaining 5% must be maintained as a minimum fund balance. The maximum in the general fund may not exceed 18% of the total estimated revenue of the general fund. For the year ended June 30, 2012 the City’s general fund will not exceed the 18% limit.

NOTE 3. DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS

The following notes present detail information to support the amounts reported in the financial statements for its assets, liabilities, equity, revenues, and expenditures/expenses.

3.A. CASH AND INVESTMENTS

DepositsDeposits – Custodial Credit Risk: Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City does not have a policy for custodial credit risk. As of June 30, 2012, The City’s custodial credit risk for deposits is as follows:


44

BalanceCustodial Credit Risk June 30, 2012

Depository Accounts Insured 250,000$ Uninsured and uncollateralized 2,653,438

Total Depository Accounts 2,903,438$

Investments

As of June 30, 2012 the government had the following investments and maturities:

Less MoreFair Value Than 1 1-5 6-10 Than 10

Investments in Public$31,513,039 31,513,039$ -$ -$ -$

1,398,409 1,398,409 - - -694,240 694,240 - - -

33,605,688$ 33,605,688$ -$ -$ -$Total Fair Value

Investment Maturity in Years

Treasurers' Bond EscrowsMoney Market

Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City’s policy for managing its exposure to fair value loss arising from increasing interest rates is to comply with the State’s Money Management Act. Section 51-7-11 of the Act requires that the remaining term to maturity of investments may not exceed the period of availability of the funds to be invested.

Credit Risk – The City follows the requirements of the Utah Money Management act (Section 61, chapter 7 of the Utah Code) in handling its depository and investing transactions. City funds are deposited in qualified depositories as defined by the Act. The Act also authorizes the City to invest in the Utah Public Treasurers’ Investment Fund (UPTIF), trade commercial paper, bankers’ acceptances, repurchase agreements, corporate bonds, restricted mutual funds, and obligation of government entities within the State of Utah. The UPTIF is invested in accordance with the Act. The State Money Management Council provides regulatory oversight for the UPTIF. The degree of risk of the UPTIF depends upon the underlying portfolio. The act and Council rules govern the financial reporting requirements of qualified depositories in which public funds may be deposited and prescribe the conditions under which the designation of a depository shall remain in effect. If a qualified depository should become ineligible to hold public funds, public treasurers are notified immediately. The City considers the actions of the Council to be necessary and sufficient for adequate protection of its investments. The City has no investment policy that would further limit its investment choices. The UPTIF is unrated.


45

The deposits and investments described above are included on the Statement of Net Assets as per the following reconciliation:

Reconciliation to Government-wide Statement of Net Assets:Deposits & Investments 2,866,236$Investments 33,605,688Cash on hand 37,202

Total 36,509,126$

Government - WideCash and Cash Equivalents 29,113,499$Restricted Cash & Cash Equivalents 7,339,482Fiduciary Restricted Cash 56,145

Total 36,509,126$

Net Cash on Statement of Net Assets 36,452,981$Fiduciary Restricted Cash 56,145

Total 36,509,126$

**The remainder of this page intentionally left blank**


46

3.B. RESTRICTED ASSETS

The amounts reported as restricted assets or cash, investments, and accrued interest held by the trustee bank on behalf of the various public trusts (Authorities) related to their required note payable accounts as described in Note 2.C, and amounts held in trust for developers and unspent impact fees collected. The restricted assets as of June 30, 2012 are as follows:

Type of Restricted Asset Cash/Time Deposits Investments Accrued Int. TotalBusiness-Type Activities:Water right fees 454,608$ -$ -$ 454,608$ Storm drainage impact fees 263,524 - - 263,524Water bond requirements 210,376 - - 210,376Electric bond requirements 749,293 - - 749,293

Total 1,677,801$ -$ -$ 1,677,801$ Governmental Activities:Developer escrows 2,015,207$ -$ -$ 2,015,207$ Debt Service 381,016.0 - - -Class "C" roads 925,086 - - 925,086RDA requirements 3,248,324 - - 3,248,324

Total 6,569,633 - - 6,188,617Grand Totals 8,247,434$ -$ -$ 7,866,418$


47

3.C. ACCOUNTS RECEIVABLE

Accounts receivable of the business-type activities and of the governmental activities at June 30, 2012, were as follows:

Governmental Business-TypeActivities Activities Total

Accounts receivables -$ 3,871,761$ 3,871,761$Property tax 1,482,392 - 1,482,392Other tax 1,152,706 - 1,152,706Allowance for doubtful accounts - (44,808) (44,808)Net accounts receivable 2,635,098$ 3,826,953$ 6,462,051$

Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period.Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows:

Unavailable UnearnedProperty taxes receivable (general fund) 1,482,392$ -$

- -Total deferred/unearned revenue for governmental funds 1,482,392$ -$


48

3.D. CAPITAL ASSETS

Capital asset activity for the year ended June 30, 2012, was as follows:

Balance at Balance at June 30, 2011 Additions Adjustments Disposals June 30, 2012

Governmental activities: Land (not being depreciated) 11,297,842$ 626,170$ -$ -$ 11,924,012$ Buildings 25,702,410 4,272,061 - - 29,974,471 Improvements 19,525,488 937,626 - (23,626) 20,439,488 Machinery and equipment 11,439,392 1,494,362 - (623,635) 12,310,119 Infrastructure 59,598,057 3,011,546 - - 62,609,603

Totals at historical cost 127,563,189 10,341,765 - (647,261) 137,257,693 Less accumulated depreciation Buildings (6,589,970)$ (844,256)$ -$ -$ (7,434,226) Improvements (3,739,368) (737,126) - 4,725 (4,471,769) Machinery and equipment (8,079,510) (1,019,647) - 599,427 (8,499,730) Infrastructure (27,745,473) (2,486,169) - - (30,231,642)

Total accumulated depreciation (46,154,321) (5,087,198) - 604,152 (50,637,367) Governmental activities capital assets, net 81,408,868$ 5,254,567$ -$ (43,109)$ 86,620,326$

Business-type activities: Land (not being depreciated) 2,134,479$ 292,526$ -$ -$ 2,427,005$ Water shares (not being depreciated) 4,417,387 41,252 - - 4,458,639 Buildings and structures 6,565,922 331,536 - - 6,897,458 Improvements 147,101,790 7,150,791 - (204,178) 154,048,403 Machinery and equipment 7,767,935 890,091 - - 8,658,026

Totals at historical cost 167,987,513 8,706,196 - (204,178) 176,489,531 Less accumulated depreciation Buildings and structures (2,292,923) (180,158) - - (2,473,081) Improvements other than buildings (46,957,965) (4,200,053) - 154,922 (51,003,096) Machinery and equipment (3,791,824) (637,407) - - (4,429,231)

Total accumulated depreciation (53,042,712) (5,017,618) - 154,922 (57,905,408) Business-type activities capital assets, net 114,944,801$ 3,688,578$ -$ (49,256)$ 118,584,123$


49

Depreciation expense was charged to governmental activities as follows:

Governmental activities:General government 262,938$ Public safety 717,137 Public works 2,529,856 Parks 707,796 Governmental portion of internal service fund 869,471

Total depreciation expense - governmental activities 5,087,198$

Business-type activitiesWater 2,233,490$ Electric 1,204,636 Sewer 1,141,355 Garbage 41,840 Golf course 54,195 Swimming pool 22,249 Storm drainage 301,446 Gun club 18,407

Total depreciation expense - business-type activities 5,017,618$

3.E. ACCOUNTS PAYABLE

Accounts payable are composed of payroll related items, sales taxes and day to day operating purchases.


50

3.F. LONG-TERM DEBT

The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities.

Governmental Activities:

As of June 30, 2012, the governmental long-term debt of the financial reporting entity consisted of the following:

In terest M aturityR ate D ates B alance

Sales T ax R evenue B ondSeries 2007 4.0% to(O riginal am ount $22,000,000) 4 .750% 2027 18,650,000

T otal bonds payable - governm ental activ ities 18 ,650,000$L ess current portion (925,000)

T otal long term portion of bonds payable - governm ental activ ities 17 ,725,000$

Capital leases payable

Governmental activities: (Internal Service Fund)

Capital leases payable 148,455Current portion of capital leases payable (53,312)Long term portion of capital leases payable 95,143$



51

Business-type Activities:

As of June 30, 2012, the long-term debt payable from proprietary fund resources consisted of the following:

Interest MaturityRate Dates Balance

Water Revenue Bonds Series 2011Dated October 25, 2011 3.40% to(Original amount $1,880,000) 4.35% 2031 1,880,000$

Electric Utility Revenue Refunded Bond 2009Dated December 29, 2009(Original amount $4,690,000) 2.75% 2016 3,235,000

Water Revenue Refunding Bonds 2010Dated August 18, 2010 4.00% to 5,660,000(Original amount $12,895,000) 5.50% 2017

Total bonds payable - business-type activities 10,775,000Less current portion (1,935,000)Total bonds payable - long term portion 8,840,000$



52

Changes in Long-term Debt:

The following is a summary of changes in long-term debt for the year ended June 30, 2012:Governmental activities: Bonds payable 18,650,000$ (925,000)$ 17,725,000$ Capital leases payable 148,455 (53,312) 95,143 Compensated absences 1,130,067 35,618 1,165,685

Total - Governmental Activities 19,928,522$ 35,618$ (978,312)$ 18,985,828$

Business-type Activities: Bonds payable 8,895,000$ 3,815,000$ (1,935,000)$ 10,775,000$ Compensated absences 455,989 36,846 492,835

Total - Business-type Activities 9,350,989$ 3,851,846$ (1,935,000)$ 11,267,835$

Due Within One Year 2,739,029$ 2,913,312$ (2,739,029)$ (2,913,312)$

Annual Debt Service Requirements:

The annual debt service requirements to maturity, including principal and interest, for long-term debt as of June 30, 2012, are as follows:

Year EndingJune 30 Principal Interest Principal Interest

2013 925,000$ 824,375$ 1,935,000 254,4172014 950,000 787,375 1,987,000 198,9902015 975,000 749,375 2,043,000 142,0072016 1,025,000 710,375 2,095,000 94,767 2017 1,075,000 669,375 1,117,000 58,266 2018-2022 6,100,000 2,626,375 484,000 131,6482023-2027 7,600,000 1,112,813 530,000 84,711 2028-2032 584,000 33,155

Total 18,650,000$ 7,480,063$ 10,775,000$ 997,961$ -

Governmental ActivitiesBonds Payable

Business-type ActivitiesBonds Payable


53

Depreciation and Other Information on Capital Leases The assets acquired through capital leases are as follows:

Asset: Governmental ActivitiesMachinery and equipment 308,282$Less: Accumulated depreciation (143,921)

Total 164,361$

Amortization of capital assets purchased under capital leases is included in depreciation expense.

The present value of future minimum capital lease payments under these leases as of June 30, 2012 are:

Fiscal Year Amount2013 59,9542014 98,000

Total minimum lease payments 157,954Less amounts representing interest (9,499)Present value of minimum lease payments 148,455$



54

3.G. INTERFUND TRANSACTIONS AND BALANCES

Operating Transfers:

Governmental Activities : Transfers in Transfers outGeneral fund -$ 957,809$ Debt Service Fund 931,106 Capital project fund-River Reclaim 77,644 Capital project fund-Cut Bridge W 480,165 Capital project fund-Fairgrounds 1,500,000 Capital project fund-North Park 3,300,000

Total Governmental Activities 6,288,915 957,809 Business-type Activities:

Major funds:Electric fund - 5,678,182

Non-major funds:Golf course 199,761 - Swimming pool 147,315 -

Total Business-type Activities 347,076 5,678,182 Grand Totals 6,635,991$ 6,635,991$

Transfers and payments within the reporting entity are substantially for the purpose of subsidizing operating functions, funding capital projects and asset acquisitions, or maintaining debt service on a routine basis. Resources are accumulated in a fund or component unit to support and simplify the administration of various projects or programs.

Plant Assessments: Paid Received

Business-type Activities:Water fund 136,284$ -$ Sewer fund 9,567 -Electric fund 68,142 -Broadband plant - 213,993

Totals 213,993$ 213,993$

Plant assessments are each funds share of the cost of the use of assets purchased with the bond in the electric fund.


55

Indirect services:Indirect Service Indirect Service

Expense RevenueMajor Business-type activities:

Water Fund 629,433$ -$Sewer Fund 457,424 -Electric Fund 532,791 -

Non-major business type activities:Golf Course 26,005 -Swimming Pool 19,966 -Garbage 53,525 -Storm Drain 273,274 -

Major Governmental activities:General fund - 1,992,418

1,992,418$ 1,992,418$

Indirect services are charges assessed to the business type activities for services provided by the general fund. Due to/from other funds:

Due from Due toGovernmental funds General fund 541,027$ 70,370$ Non-major funds Special revenue fund 1,046,209 - Debt service fund 119,520 - Capital projects fund 570,718 -

Total Governmental 2,277,474 70,370 Business-type funds Major funds Water fund 854,270 2,148,334 Sewer fund 4,040,138 6,405,302 Electric fund 6,147,300 1,717,078 Non-major funds Golf course fund 1,890,899 4,692,144 Swimming pool fund - 36,027 Garbage fund 850,819 - Storm drainage fund - 413,588 Gun club fund 47,875 -

Total Business-Type 13,831,301 15,412,473 Internal service fund Motorpool fund - 625,932 Grand Total 16,108,775$ 16,108,775$

Fund


56

3.H. RESERVED FUND BALANCES

The City has reserved fund balance amounts for impact fees. The City has reserved net assets in the Proprietary Fund for unspent impact fees. These fees will be used to construct appropriate projects as designated by the impact fee ordinance. The City has reserved net assets in the Water Fund and the Electric Fund and fund balance in the Debt Service fund for the debt service requirements of the bonds acquired.

NOTE 4. OTHER NOTES

4.A. EMPLOYEE PENSION AND OTHER BENEFIT PLANS

The City participates in the following employee pension systems:

Local Governmental - Cost Sharing Defined Benefits Pension Plans

Plan Description. The City contributes to the Local Governmental Noncontributory Retirement System (Noncontributory System), and the Public Safety Retirement System (Public Safety System) for employers with (without) Social Security coverage, all of which are cost-sharing, multiple-employer defined benefit pensions plans administered by the Utah Retirement Systems (Systems). The Systems provide, retirement benefits, annual cost of living allowances, death benefits and refunds to plan members and beneficiaries in accordance with retirement statutes established and amended by the State Legislature.

The Systems are established and governed by the respective sections of Chapter 49 of the Utah Code Annotated 1953 (Chapter 49) as amended, which also establishes the State Retirement Office (Office) for the administration of the Utah retirement Systems and Plans. Chapter 40 places the Systems, the Office and related plans and programs under the direction of the Utah State Retirement Board (Board) whose members are appointed by the Governor. The Systems issue a publicly available financial report that includes financial statements and required supplementary information for the Systems and Plans. A copy of the report may be obtained by writing to the Utah Retirement Systems, 540 East 200 South, Salt Lake City, Utah 84102 or by calling 1-800-365-8772.

Funding Policy. The City is required to contribute a percentage of covered salary to the respective systems, 10.33% to the Contributory Tier 2, 13.77% to the Noncontributory Tier 1, 16.27% to the Public Safety Contributory Tier 2, and 27.07% to the Public Safety Noncontributory Tier 1. The contribution rates are the actuarially determined rates and are approved by the Board as authorized by Chapter 49.

The City contributions to the various systems for the years ending June 30, 2012, 2011, and 2010 were; for the Contributory System Tier 2 $5,592, $0, $0; for the Noncontributory System Tier 1 $845,990, $792,002, and $687,518; for the Public Safety


57

Contributory Tier 2 $228, $0, $0; for the Public Safety Noncontributory Tier 1 $390,106, $362,584.62, and $318,149 respectively. The contributions were equal to or greater than the required contributions for each year.

401(k) Plan

The employees of City also participate in a 401(k) deferred compensation plan with Great West Retirement Services. The amount of the employer contributions for the year ended June 30, 2012, 2011 and 2010, were $363,364, $403,202, and $402,160 respectively.

4.B. RISK MANAGEMENT

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City has joined together with other government in the State of Utah to form the Utah Risk Management Mutual Association (URMMA), a public entity risk pool currently operating as a common risk management insurance program for the Utah State governments. The City pays an annual premium to URMMA for its tort liability insurance coverage.

4.C. COMMITMENTS AND CONTINGENCIES

The City is involved in claims arising in the normal course of business. It is not possible to state the ultimate liability, if any, in these matters. In the opinion of management, such litigation will have no material effect on the financial operations of the City.

4.D. JOINT VENTURES

Utah Municipal Power Agency

In September, 1980, Spanish Fork City joined in a joint venture with several other municipalities to create the Utah Municipal Power Agency (UMPA). UMPA was created under the Inter-local Cooperation Act to evaluate, finance, construct and operate facilities for the generation, transmission and distribution of electric power for member cities.

Additional information is as follows: a. Participants and their percentage shares: Spanish Fork City Corporation 9.409% Provo City Corporation 80.540% Nephi City Corporation 5.839% Manti City Corporation 2.164% Salem City Corporation 1.446% Levan Town 0.602% 100.000%


58

b. UMPA is governed by a Board of Directors which is comprised of six directors. The Mayor and City Council of each member-City appoints one director. All decisions of the Board are made by majority vote, except in specific decisions as described in the Inter-local Cooperation Agreement which stipulates that votes shall be by number of kilowatt hours sold. For Provo to prevail in a tie vote, they would need one additional city to vote with them.

c. The UMPA Board of Directors governs the operations of the Agency through management employed by the Board. Since UMPA is subject to the same laws as the creating entities, it must follow State law for cities in the areas of fiscal management, budgeting, and financing.

d. Audited summary financial information of UMPA at June 30, 2012 is as follows from UMPA:

Spanish ForkUMPA City's Share

Total assets 42,138,960$ 3,964,855$

Total liabilities 42,135,610$ 3,964,540$

Total net assets 3,350$ 315$

Total operating revenues 68,159,908$ 6,413,166$Total operating expenses (64,512,428) (6,069,974)$Net operating income 3,647,480 343,191$ Total non-operating income (expenses) (3,647,480) (343,191) Change in net assets -$ -$

The joint venture has the following long-term debt:

Revenue bonds payable 21,707,607$ 2,042,469$

e. Audited financial statements for Utah Municipal Power Agency are available at UMPA’s office.


59

South Utah Valley Solid Waste DistrictSpanish Fork City joined in a joint venture with several other municipalities to create the South Utah Valley Solid Waste District (the District). The District was created for the purpose of building a landfill and transfer station and operating the same for the benefit of member municipalities. The majority of the District’s sanitation service revenue comes from these governmental entities.

Additional information is as follows:

a. Participants and their percentage shares: Spanish Fork City Corporation 11.750% Provo City Corporation 69.750% Springville City Corporation 15.000% Mapleton City Corporation 2.000% Salem City Corporation 1.500% Goshen Town (Landfill participant) 0.000% 100.000%

b. The District is governed by a Board of Directors which are comprised of six directors. The Mayor and City Council of each member appoints one director. All decisions of the Board are by majority vote, except in the case of a tie. In a tie, the votes would be taken by tonnage. For Provo to prevail in a tie vote they would need one additional city to vote with them.

c. The District’s Board of Directors governs the operations of the District through management employed by the Board. Since the District is subject to the same laws as the creating entities, it must follow State law for cities in the areas of fiscal management, budgeting and financing.


60

d. Audited summary financial information of the District as June 30, 2012 is as follows from SUVSWD:

South UtahValley Solid Spanish Fork

Waste District City's Share

Total assets 17,494,582$ 2,055,613$

Total liabilities 5,872,934$ 690,070$

Total net assets 11,621,648$ 1,365,544$

Total operating revenues 5,295,605$ 622,234$ Total operating expenses 5,980,683 702,730 Net operating income (685,078) (80,497) Total non-operating income (expenses) 6,606 776 Change in net assets (678,472)$ (79,720)$

The joint venture has the following long-term debt:

Closure and postclosure liability 2,963,891$ 348,257$ Accrued compensated absences 249,619 29,330 Long Term Debt 1,914,076 224,904 Total long-term liabilities 5,127,586$ 602,491$

f. Audited financial statements for South Utah Valley Solid Waste District are available at the District office.


61

Spanish Fork/Springville AirportThe City is party to a joint venture with Springville, a neighboring municipality, in the Spanish Fork/Springville Airport (the airport). The joint venture is organized as a special service district of the cities of Springville and Spanish Fork under an inter-local agreement per Section 11-13 of the Utah Code. It was created to provide airport services for both communities. Additional information is as follows:

a. Participants and their percentage shares: Springville City 50.00% Spanish Fork 50.00%

b. The Airport is governed by it’s own board which is selected from members of the participants’ City councils and other citizens of the two communities.

c. The Airport board governs the operations of the airport through management employed by the board. The Airport is subject to the same laws as the creating entities, therefore, it must follow Utah State laws for cities in the areas of fiscal managements, budgeting and financing. As the governing board is made up of the participants’ city councils and appointees, each participant has indirect control over these matters.

d. Summary financial information, as of the joint venture’s last year end of June 30, 2012, is as follows:

Spanish Fork/Springville Spanish Fork

Airport City's Share

Total assets 6,615,076$ 3,307,538$

Total liabilities (462,022)$ (231,011)$

Total net assets 6,153,054$ 3,076,527$

Program revenues 968,313$ 484,157$ General revenues 3,901 1,951 Program expenses (295,998) (147,999)

Change in net assets 676,216$ 338,108$

e. Audited financial statements for the Spanish Fork/Springville Airport are available at the Airport offices, 50 South Main, Springville, Utah.


62

4.E. WATER LOAN PROGRAM

The following information is presented as required by the State of Utah Water Loan Program:

1. Fidelity Bonds A. Public Treasurer Bond for $1,500,000 expiring June 16, 2013 issued by

Moreton & Company. B. $100,000 Blanket Employee Bond expiring March 31, 2013 covering all

employees and elected officials of the City issued by Moreton & Company.

2. 9,544 water connections at June 30, 2012

3. Total culinary water billings for the year were $2,265,868.

4. Rate schedule Base charge $10.00 Price per 1,000 gallons for usage over base: 0 to 9,000 gallons $ 1.19 9,001 to 16,000 gallons $ 1.72 Over 16,000 gallons $ 3.44 Connection/Impact fee (1 inch) $ 807.00


63

4.F. SPANISH FORK REDEVELOPMENT AGENCY

The following information is presented as required by the Utah State Code Section 17A-2-1217(3):1. The tax increment collected by the agency for each project area:

A. North Industrial RDA 283,474$ B. Kirby RDA 341,592 C. Wasatch Wind CDA 312,996

Total Collected 938,062$

2. The amount of tax increment paid to any taxing agency:A. North Industrial RDAB. Kirby RDAC. Wasatch Wind CDA 93,899 Total Paid 93,899$

3. The outstanding principal amount of loans incurredto finance the cost associated with the project areas: -$

4. The actual amounts expended for :A. Acquisition of property 28,349$ B. Site improvements 136,765 C. Installation of public utilities and roadsD. Administrative & contracted costs 203,447 Total Expended 368,561$

4.G. SUBSEQUENT EVENTS

Water Revenue Bond 2012

On July 2, 2012, the City issued Water Revenue Bonds in the amount of $4,041,000. The proceeds from these bonds have, and will be, used for water line replacements and improvements to the Cold Springs Collection system. The bonds bear interest of 2.58% and will mature on June 1, 2022. The first payment of $43,151.15 is due on December 1, 2012 which consists entirely of interest.

Subsequent Event Evaluation

Subsequent events were evaluated through November 19, 2012, which is the date that the financial statements were available to be issued.

64


65

SUPPLEMENTARY INFORMATION

66


67The Notes to the Financial Statements are in Integral Part of This Statement

Spanish Fork City Combining Balance Sheet

Non-Major Governmental Funds As of June 30, 2012

Total Projects Non-major

RDA Debt Service Special River Reclaim. Street Cut GovernmentalFund Fund Fund Fund Bridge Fund Funds

ASSETSCash and cash equivalents -$ 224,926$ 26,645$ 4,775$ 307,474$ 563,820$ Prepaid interest - - - - - - Accounts receivable - 9,925 - - - 9,925 Due from other funds 1,046,209 106,861 12,659 2,269 146,078 1,314,076 Restricted Assets:

Cash and cash equivalents 2,202,115 - - - - 2,202,115 Total assets 3,248,324$ 341,712$ 39,304$ 7,044$ 453,552$ 4,089,936$


Accounts Payable 124,844$ -$ -$ 7,039$ -$ 131,883 Due to other funds - - - - - - Total liabilities 124,844$ -$ -$ 7,039$ -$ 131,883$

Fund balances:Restricted for:

Redevelopment 3,123,480 - - - - 3,123,480 Debt Service - 341,712 39,304 - - 381,016

Committed for:Capital projects - - - 5 453,552 453,557

Total fund balances 3,123,480 341,712 39,304 5 453,552 3,958,053 Total liabilities and fund bal 3,248,324$ 341,712$ 39,304$ 7,044$ 453,552$ 4,089,936$

Debt ServiceCapital


Spanish Fork City Combining Statement of Revenues, Expenditures, and Changes in Fund Balance

Non-Major Governmental Funds For the Year Ended June 30, 2012

TotalSpecial River Street Non-major

Fund Debt Service Guarantee Reclamation Cut Brige GovernmentalREVENUES: Fund Fund Fund Fund Fund Funds

Taxes 938,062$ -$ -$ -$ -$ 938,062 Sundry Revenues - 824,102 - - 151,116$ 975,218 Intergovernmental - - - - - Interest income - 4,808 - - - 4,808

Total revemues 938,062 828,910 - - 151,116 1,918,088

EXPENDITURES:Current Expenditures: RDA 465,914 - - - - 465,914 Debt service: Principal retirement - 875,000 - - - 875,000 Interest and fiscal charges - 863,125 - - - 863,125 Capital outlay - - - 159,995 177,729 337,724

Total expenditures 465,914 1,738,125 - 159,995 177,729 2,541,763

Excess of revenues over (under) expenditures 472,148 (909,215) - (159,995) (26,613) (623,675)

Other financing sources (uses):Transfers in (out) - 931,106 - 77,644 480,165 1,488,915

Total other financing sources (uses) - 931,106 - 77,644 480,165 1,488,915

Excess of revenues and other sources over (under) expenditures and othe 472,148 21,891 - (82,351) 453,552 865,240

Fund balances - beginning of year 2,651,332 319,821 39,304 82,356 - 3,092,813 Fund balances - end of year 3,123,480$ 341,712$ 39,304$ 5$ 453,552$ 3,958,053$

Debt Service ProjectsCapital


Spanish Fork City Combining Statement of Net Assets

Non-Major Proprietary Funds As of June 30, 2012

Golf Course Swimming Garbage Storm Gun Club TotalFunds Pool Fund Fund Drainage Fund Fund Other Funds

ASSETSCurrent assets: Cash and cash equivalents 3,980,785$ 540$ 972,645$ -$ 101,170$ 5,055,140$

Accounts receivable (34) - 139,697 190,306 13 329,982 Allowance for doubtful accounts - - (1,730) (488) - (2,218) Due from other funds 1,890,899 - 850,819 - 47,875 2,789,593 Inventory 24,866 - - - 14,204 39,070

Total current assets 5,896,516 540 1,961,431 189,818 163,262 8,211,567

Noncurrent assets:Restricted cash and equivalents - - - 263,524 - 263,524 Capital Assets:

Land 19,955 - 143,505 120,336 - 283,796 Buildings 676,073 - 48,066 - 28,116 752,255 Improvements 1,154,723 2,292,705 111,779 12,316,119 95,473 15,970,799 Equipment 174,870 13,160 810,604 - 84,120 1,082,754

Less: accumulated depreciation (1,722,934) (1,897,807) (711,368) (1,847,046) (105,446) (6,284,601)

Other Assets:Equity in joint venture - - 1,365,544 - - 1,365,544

Total noncurrent assets 302,687 408,058 1,768,130 10,852,933 102,263 13,434,071 Total assets 6,199,203$ 408,598$ 3,729,561$ 11,042,751$ 265,525$ 21,645,638$

LIABILITIESCurrent liabilities:

Due to other funds 4,692,144$ 36,027$ -$ 413,588$ -$ 5,141,759$ Accounts payable 62,387 25,469 95,002 5,011 4,594 192,463 Compensated absences 33,432 2,385 6,342 22,520 606 65,285

Total current liabilities 4,787,963 63,881 101,344 441,119 5,200 5,399,507

Noncurrent liabilities:Deferred revenue - - - 5,000 - 5,000 Total noncurrent liabilities - - - 5,000 - 5,000 Total liabilities 4,787,963 63,881 101,344 446,119 5,200 5,404,507

NET ASSETSInvested in capital assets, net of related debt 302,687 408,058 402,586 10,589,409 102,263 11,805,003

Restricted for:Impact fees - - - 263,524 - 263,524

Unrestricted 1,108,553 (63,341) 3,225,631 (256,301) 158,062 4,172,604 Total net assets 1,411,240$ 344,717$ 3,628,217$ 10,596,632$ 260,325$ 16,241,131$



Spanish Fork City Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets

Non-Major Proprietary Funds For the Year Ended June 30, 2012

Golf Course Swimming Garbage Storm Gun Club TotalFunds Pool Fund Fund Drainage Fund Fund Other Funds

Operating Revenues: Charges for sales and services 726,050$ 203,277$ 1,322,454$ 910,084$ 205,418$ 3,367,283$ Other income 169 - - 175,136 78,540 253,845 Total operating revenues 726,219 203,277 1,322,454 1,085,220 283,958 3,621,128

Operating Expenses:Landfill fees - - 1,114,464 - - 1,114,464 Employee salaries 394,083 229,953 52,848 278,369 58,025 1,013,278 Materials and supplies 118,504 39,536 4,253 31,278 74,087 267,658 Repairs and maintenance 58,979 9,168 - 3,162 22,783 94,092 Professional services 9,887 19,757 19,001 41,192 35,787 125,624 Motorpool charges 154,174 702 2,174 99,904 168 257,122 Utilities 26,503 42,332 - - 8,106 76,941 Insurance 12,073 2,994 72 6,661 274 22,074 Depreciation 54,195 22,250 41,841 301,446 18,407 438,139 Indirect services 26,005 19,966 53,525 273,214 - 372,710 Sundry charges 12,708 - 3,669 1,552 - 17,929

Total operating expenses 867,111 386,658 1,291,847 1,036,778 217,637 3,800,031 Operating income (140,892) (183,381) 30,607 48,442 66,321 (178,903)

Nonoperating revenues (expenses): Impact fees - - - 153,113 - 153,113 Change in joint venture equity - - (61,253) - - (61,253)

Contributions from private contractors - - - 143,386 - 143,386

Total nonoperating revenues (expenses) - - (61,253) 296,499 - 235,246

Income (loss) before operating transfers (140,892) (183,381) (30,646) 344,941 66,321 56,343

Operating Transfers:Operating transfers in 199,761 147,315 - - - 347,076

Total operating transfers 199,761 147,315 - - - 347,076

Change in net assets 58,869 (36,066) (30,646) 344,941 66,321 403,419 Total net assets - beginning 1,352,371 380,783 3,658,863 10,251,691 194,004 15,837,712 Total net assets - ending 1,411,240$ 344,717$ 3,628,217$ 10,596,632$ 260,325$ 16,241,131$



Spanish Fork City Combining Statement Cash Flows

Non-Major Proprietary Funds For the Year Ended June 30, 2012

TotalGolf Course Swimming Garbage Storm Gun Club Non-Major

Funds Pool Fund Fund Drainage Fund Fund FundsCash Flows From Operating Activities

Receipts from customers 726,084$ 203,277$ 1,307,668$ 832,532$ 205,418$ 3,274,979$Other cash receipts 169 - - 175,136 78,540 253,845 Payments to suppliers (385,486) (131,616) (1,199,697) (491,535) (148,293) (2,356,627)Payments to employees (386,588) (228,864) (52,319) (276,790) (57,945) (1,002,506)

Net cash provided (used) by operating activities (45,821) (157,203) 55,652 239,343 77,720 169,691

Cash Flows From NoncapitalFinancing ActivitiesDecrease (increase) in due from other funds (429,749) - (361,755) 254,824 (28,655) (565,335) Increase (decrease) in due to other funds 325,203 9,888 - 413,588 - 748,679 Transers in (out) 199,761 147,315 - - - 347,076

Net cash provided (used) by noncapital activities 95,215 157,203 (361,755) 668,412 (28,655) 530,420

Cash Flows From Capital and Related Financing Activities

Purchases of capital assets - - (36,834) (1,626,204) - (1,663,038)Contributions from private contractors - - - 143,386 - 143,386 Impact fees collected - - - 153,113 - 153,113

Net cash provided (used) by capital and related financing activities - - (36,834) (1,329,705) - (1,366,539)

Cash Flows From Investing ActivitiesNet cash provided (used) by investing activities - - - - - -

Net increase (decrease) in cash and cash equivalents 49,394 - (342,937) (421,950) 49,065 (666,428) Cash and cash equivalents, July 1 3,931,391 540 1,315,583 685,475 52,103 5,985,092 Cash and cash equivalents, June 30 3,980,785$ 540$ 972,646$ 263,525$ 101,168$ 5,318,664$

Reconciliation of operating income to net cash provided (used) by operating activities:

Operating income (140,892)$ (183,381)$ 30,607$ 48,442$ 66,321$ (178,903)Adjustments to reconcile operating income to net cash provided (used) by operating activities:

Depreciation expense 54,195 22,250 41,841 301,446 18,407 438,139 (Increase) decrease in accounts receivable 34 - (14,786) (77,549) - (92,301) (Increase) decrease in inventory 344 - - - 7,354 7,698 Increase (decrease) in accrued liabilities 33,003 2,839 (2,539) (34,575) (14,442) (15,714) Increase (decrease) in compensated absences 7,495 1,089 529 1,579 80 10,772

Total adjustments 95,071 26,178 25,045 190,901 11,399 348,594 Net cash provided (used) by operating activities (45,821)$ (157,203)$ 55,652$ 239,343$ 77,720$ 169,691$


72


73

OTHER REPORTS

74


75

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN

AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Mayor and Members of the City Council Spanish Fork City, Utah


We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Spanish Fork City, Utah (herein referred to as the “City”), as of and for the year ended June 30, 2012, which collectively comprise the City’s basic financial statements and have issued our report thereon dated January 28, 2013. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.

Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

76

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City’s basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

This report is intended for the information of the Mayor and City Council, management, others within the entity, and various federal and state funding and auditing agencies and is not intended to be and should not be used by anyone other than these specified parties.


77

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE IN ACCORDANCE WITH THE STATE OF UTAH LEGAL COMPLIANCE AUDIT GUIDE

The Honorable Mayor andMembers of the City Council Spanish Fork City, Utah


We have audited Spanish Fork City’s compliance with general and major state program compliance requirements described in the State of Utah Legal Compliance Audit Guide for the year ended June 30, 2012. The general compliance requirements applicable to the City are identified as follows:

Public Debt Cash Management

Purchasing Requirements Budgetary Compliance

Truth in Taxation and Property Tax Limitations Liquor Law Enforcement B& C Road Funds

Other General Compliance Issues Uniform Building Code Standards Impact Fees and Other Development Fees Asset Forfeiture Utah Retirement Systems Fund Balance

The City received the following major State assistance programs from the State of Utah:

B&C Road Funds (Department of Transportation) Liquor Law Enforcement

Compliance with the requirements referred to above is the responsibility of the City’s management Our responsibility is to express an opinion on compliance with those requirements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the State of Utah Legal Compliance Audit Guide. Those standards require that we plan and perform the audit to obtain

78

reasonable assurance about whether noncompliance with the requirements referred to above could have a material effect on the major assistance programs or general compliance requirements identified above. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City’s compliance with those requirements.

In our opinion, Spanish Fork City, Utah, complied, in all material respects, with the general compliance requirements identified above and the compliance requirements that are applicable to each of its major state programs for the year ended June 30, 2012.

This report is intended solely for the information and use of the city, management, others within the organization, Office of the Utah State Auditor, and various State funding and auditing agencies and is not intended to be and should not be used by anyone other than these specified parties. However, the report is a matter of public record and its distribution is not limited.


79

SINGLE AUDIT REPORT

80


81

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR

PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

The Honorable Mayor and City Council Spanish Fork City Spanish Fork, Utah

Compliance

We have audited Spanish Fork City’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Spanish Fork City’s major federal programs for the year ended June 30, 2012 . Spanish Fork City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of Spanish Fork City’s management. Our responsibility is to express an opinion on Spanish Fork City’s compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Spanish Fork City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Spanish Fork City’s compliance with those requirements.

In our opinion, Spanish Fork City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2012.

Internal Control Over Compliance

Management of Spanish Fork City is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Spanish Fork City’s internal control over compliance with the requirements that could have a direct and material effect

82

on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Spanish Fork City’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of management, City Council, others within the entity, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.


83

SPANISH FORK CITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2012

SUMMARY OF AUDIT RESULTS

1. The independent auditors’ report expresses an unqualified opinion on the basic financial statements of Spanish Fork City.

2. No significant deficiencies related to the audit of the financial statements are reported in the Auditors’ Report on Internal Controls and Compliance with Laws and Regulations.

3. No instances of noncompliance material to the financial statements of Spanish Fork City were disclosed during the audit.

4. No material weaknesses relating to the audit of the major federal award program is reported in the Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133.

5. The independent auditors’ report on compliance for the major federal award programs for Spanish Fork City, expresses an unqualified opinion.

6. The audit disclosed no audit findings that are required to be reported under OMB Circular A-133.

7. The programs tested as a major programs include:

Environmental Protection Agency (Drinking Water State Revolving Funds) 66.468

8. The threshold for distinguishing Types A and B programs is $300,000 of federal awards expended.

9. Spanish Fork City was determined not to be a low-risk auditee.

84

FINANCIAL STATEMENT FINDINGS

See management letter for financial statement findings.

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No findings noted during current audit.

SUMMARY OF PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

None noted.

85

Federal CFDA Pass-Through Amount ofNumber Grantors Contract Expenditures

Direct Assistance:* ENVIRONMENTAL PROTECTION AGENCY State of Utah

Drinking Water State Revolving Funds 66.468 FS 99878411 1,480,000$ DEPARTMENT OF AGRICULTURE

National Resource Conservation Service 10.902 100,376 DEPARTMENT OF ENERGY

Energy Efficiency and Conservation Block Grant 81.128 101,991 DEPARTMENT OF HOMELAND SECURITY

FEMA Flood Grant 97.036 74,760 Homeland Security Grant Program 97.067 3,500

Indirect Assistance: -

TOTAL EXPENDITURES OF FEDERAL AWARDS 1,760,627$

* Major Program

Federal Grantor/Pass-Thru/Grantor/Program Title

SPANISH FORK CITY, UTAHSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

FOR THE YEAR ENDED JUNE 30, 2012

86

SPANISH FORK CITY NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

YEAR ENDED JUNE 30, 2012

1. GENERAL

The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of Spanish Fork City (City). The City reporting entity is defined in Note 1 to the basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed-through other government agencies are included on the schedule of expenditures of federal awards. This includes loan proceeds on federally guaranteed loans. The balance of those loans was $1,795,000 as of June 30, 2012.

2. BASIS OF ACCOUNTING

The accompanying schedule of expenditures of federal awards is presented using the modified accrual basis of accounting for expenditures in governmental fund types and on the accrual basis for expenses in proprietary fund types, which is described in Note 1 to the basic financial statements.

Documents

SPANISH FORK CITY, UTAH INDEPENDENT AUDITORS' REPORT …financialreports.utah.gov/auditedfinancial... · spanish fork city, utah table of contents year ended june 30, 2012 beginning